Analyst calls oil at $100/barrel ”pretty cheap”

WASHINGTON (Reuters) – Crude oil at $100 a barrel would still be “pretty cheap” because global oil demand shows no signs of abating and new energy sources are in short supply, a prominent U.S. oil analyst said on Thursday.

Matt Simmons, founder of Houston-based Simmons and Co International, dismissed the idea that a looming U.S. recession will tame crude oil prices, which have tumbled since they peaked above $100 a barrel on January 3.


“Demand is far more durable than anyone ever thought,” Simmons told Reuters in an interview. “We’re on an insatiable growth curve.”

Simmons, one of the most outspoken proponents of the “peak oil” theory that world oil production is declining irreversibly, noted that thinning inventories, soaring demand from China, geopolitical turmoil and a weak dollar have pushed crude prices up more than 70 percent from a little over a year ago.

He declined to predict where crude oil prices will top out this year, but dismissed the U.S. Energy Information Administration’s view that crude oil prices could drop below $90 a barrel this year.

Reuters