Oil prices to double by 2012

Peak Oil

According to an analysis by a Canadian bank, the combination of the flatness of oil supplies and reserves in combination with the steeply rising demand will force the price of oil to double over the next 4 years.

Apparently the fact that demand in the industrialized west is expected to level off and perhaps decline is not going to ameliorate the effects of the surging consumption in the developing world.

From the article:

“‘Despite the recent record jump in oil prices, oil prices will continue to rise steadily over the next five years, almost doubling from current levels.’

The CIBC report also notes that while production increases are at a virtual standstill, global demand continues to grow.
An expected drop in demand in the United States due to higher prices and a weak economy will be more than offset by demand growth in developing nations, it says.

Rubin cites, for example, the recent launch of Tata’s 2,500-dollar car that will allow millions of households in India to soon own automobiles.

He also notes that car sales last year were up 60 percent in Russia, up 30 percent in Brazil and up 20 percent in China.”

Read the full article here.

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