A "steady ascent" of crude oil prices toward $100 (U.S.) a barrel continues, but the predicted date when that level will be hit remains a moving target, according to a CIBC World Markets report Wednesday.
The investment banking division of the Canadian Imperial Bank of Commerce (TSX: CM) predicts "new record highs of $80 a barrel this year and reaching as high as $100 a barrel by the end of 2008 as soaring oil demand outpaces growth in global supply."
However, CIBC World Markets had predicted in September 2005 that oil prices in 2007 would average $93 (U.S.) a barrel and reach $100 by late this year.
Last February, it projected an average price of $69 a barrel for this year, down from a previously reduced expectation of $80.
Oil is currently at about $74 a barrel.
But triple-digit prices "are on the horizon and may be permanent as major oil-producing countries in the developing world reduce exports to meet soaring demand at home," according to the latest projection.
In countries such as Venezuela and Iran, declining oil production and increased consumption are eating into export capacity and will reduce crude oil exports by as much as 2.5 million barrels a day between now and the end of the decade, it predicts.
"It's far from obvious who will fill that supply gap," said CIBC World Markets chief economist Jeff Rubin.
"What is obvious is that if that gap isn't filled, not only are triple-digit oil prices on the horizon, but even more problematic, are here to stay."
Posts
