Don’t get used to cheap oil, analysts say

The same cheap oil that’s providing relief to drivers and businesses in an awful economy is setting the stage for another price spike, perhaps as soon as next year, that will bring back painful memories of last summer’s $4-a-gallon gas.

The oil industry is scaling back on exploration and production because some projects don’t make economic sense when energy prices are low. And crude is already harder to find because more nations that own oil companies are blocking outside access to their oil fields.

When the world emerges from the recession and starts to burn more fuel again, and higher demand meets lower supply, prices will almost certainly shoot higher.

Some analysts say oil could eventually eclipse $150 a barrel, maybe even on its way to $200. In such a scenario, gasoline would easily cost more than the record high of $4.11 a gallon set last summer. Oil trades at about $50 today.

No one knows for sure, but some analysts say the spike could happen as soon as next year, perhaps in 2011 or 2012.

Yahoo News