2007 oil industry outlook not quite up to this year’s

After a bonanza in 2006, Big Oil is poised for a slightly smaller 2007, as slowing U.S. economic growth and an expanding global supply cushion may help keep a lid on prices.

Oil prices will continue to hover at historically high levels, analysts say, because of demand in China and the Middle East, OPEC efforts to reduce output and instability in petroleum-rich countries such as Nigeria and Iraq. Barring major supply snags, however, transportation, manufacturing and home-heating fuels should be cheaper — thanks to an anticipated production spurt from non-OPEC countries and a calmer outlook for the refining sector.
“The problem is, who expects a surprise-free environment?” said Larry Goldstein, president of the New York-based Petroleum Industry Research Foundation, an industry-financed think tank.

To that end, many analysts look for crude-oil futures next year to average more than $60 a barrel, but to hover below the 2006 average (through November) of almost $67. Oil peaked above $78 in July.

AZ Star