Crude Oil Forecast 2011

Source: Suite101

Will the price of crude oil per barrel rocket higher, stay the same, or drop? This is what some analysts are forecasting and predicting... 

Predicting or forecasting the price of crude oil in 2011 is more difficult than merely looking at an oil price chart. Huge economic forces need to be balanced out in order to even guess at future values. Here are what some analysts think.

Jeff Rubin’s 2011 Crude Oil Price Forecast

The former Chief Economist at CIBC and award winning author Jeff Rubin predicts that the price of oil in 2011 has a very good chance of being above 100 dollars a barrel. Why?

• BP Oil Spill. The damage of the 2010 oil spill will be talked about for many years to come. Accidents in underwater oil drilling might inspire governmental policy to further restrict this form of acquiring crude oil. Where will the new supply come from? While the tar sands are rich in oil the cost of extraction is also quite high. If oil companies shift their focus to the tar sands, prices will likely increase from 2010.

• Economic Recovery. 2008 was a year of global economic pain. People spent less during the recession to preserve capital. If the economy improves and demand for overseas products increase once again, global oil consumption from large ships carrying goods around the world will drive crude prices up.

Jeff Rubin further adds that in 2011 the economy might double dip which could lead to very cheap oil. But if the economy is to grow, demand for oil will go up as the supply falls thus creating inflated prices.