The Oil Drum

66 comments on I'm sure it will be just a friendly chat!!!

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Halfin on December 27, 2005 - 2:07pm

"However 2006 has the potential to be the last year that sufficient new projects come on line to match anticipated demand. Thus any momentum that has built, and it is not yet great beyond the United Kingdom, to find a more sustainable answer to international fuel needs will likely not be sustained much this next year."

I don't see this happening. If oil prices stay high, as the markets are forecasting at $50+, we will see continued pressure on Western as well as Third World nations to economize and work to develop alternative sources. It seems quite unlikely to me that oil prices will drop much lower than this, both because of pent up demand increases and through OPEC price supports. This price level should be enough to maintain considerable investment in reducing oil dependency.

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louGrinzo on December 27, 2005 - 6:40pm

Bingo! Almost no one is predicting a significant drop in oil prices, and the consensus for 2006, according to a few dozen forecasters that BusinessWeek asked, was just over $53US/barrel.

And there's no way we should expect to see anything less than an acceleration of the response (demand as well as R&D) as people realize, through empirical data, that the "high" prices are here to stay and aren't just a blip.