'Crude oil prices may fall to 53 dollar by '08'
Global crude oil prices will remain volatile in the near term but may fall to $53 a barrel by 2008 as new production facilities become operational and high prices moderate demand, the World Bank has said.
By PTI |
NEW DELHI: Global crude oil prices will remain volatile in the near term but may fall to $53 a barrel by 2008 as new production facilities become operational and high prices moderate demand, the World Bank has said.
Oil prices are likely to remain volatile in near term due to marginal spare production capacity worldwide, a World Bank report -- 'Global Economic Prospects - Managing the Next Wave of Globalization 2007' said.
International crude oil prices crossed 75 dollars a barrel early this year, partly because of tension in Middle East. The prices, however, fell to $58 a barrel early last month and presently hovering around $61.
"High prices should continue to moderate demand growth, while investments in new capacity already in the works are projected to increase output by about 15 million barrel per day (mbpd) by 2010, implying a 3 mbpd annual increase, well above expected increases in demand of between 1.5 and 2 mbpd annually," the report said.
"As a result, the price of oil is projected to decline modestly over the next two years, reaching an average level of 53 dollar in 2008," it added.
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World Bank said the decision of oil exporting nations to increase prices seems to have boomeranged. Rising prices slowed down demand, especially in developed countries, but continued to rise in developing countries like India and China.Oil demand increased by 0.5 mbpd in the first three quarters of 2006, compared with 3.2 mbpd in 2004. "Had prices remained unchanged, oil demand would have increased by some 2-2.5 mbpd," the report said.
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