Face-Off: Over A Barrel (Rubin vs. Yergin)

Oil prices are heading up. After hitting $145 last summer, then falling to $33 in February, a barrel of oil is now more than $60. How long until it’s back above $100?

Jeff Rubin: Very soon. “We’ll be back to triple-digit oil within 12 months. As soon as a recovery begins, very early in that cycle I think we’ll see the return of $100 barrels of oil. It’s inevitable. We can only hope it doesn’t have the same devastating impact on the economy, and the only way to prevent that is by going back to local economies and away from globalization.”

Daniel Yergin: Not for a while. “The only way we’ll see the return of triple-digit oil in the next year is if there’s a very dramatic event. The reality is there’s a tremendous overhang of supply. We have 6.5 million barrels of spare production capacity. Compare that to the 1 million we had in 2005. Global demand remains well below its peak in 2007, and I think will stay that way for a while.”

Newsweek