News Analysis: What is driving oil and gas prices?

… Matt Simmons, founder of Simmons & Co., expects prices to triple in the next year.

Oil will continue to rise, as last year’s plunge from record highs to below the 50 dollars mark caused many oil fields to halt production, he told reporters.

When production decreased, tight supply drove prices up. Producers will remain unable to increase supply fast enough to keep up with a coming surge in demand. That will cause oil to surge to 200 dollars per barrel in 2010, he said.

Allen Good, analyst at Morningstar, an independent research provider, also believes that supply has tightened — refiners have cut capacity because of maintenance and facility upgrades, he said.

Xinhua