Oil prices may go down in 2008

Larger supplies, more energy alternatives, and a slowing economy could be factors.

New York – Many energy experts are predicting that the price of oil will fall in 2008 from its current level of about $93 a barrel.

Behind the predictions: a slowing US economy and stronger production from both OPEC and non-OPEC sources. In addition, tensions with Iran seem to have eased somewhat, and the supply of oil from northern Iraq appears to be better. Increased production of ethanol and biodiesel will also help.


“Next year, we will probably be in a range of $80 to $85 a barrel,” says Rick Mueller, an analyst with Energy Security Analysis of Wakefield, Mass. “And if the US goes into a recession, the price forecast will be lower.”

If the price does stay in the $80 to $85 range, it will still be higher than the average price for 2007, which was closer to $71 a barrel.

The prospect of oil remaining under $100 a barrel could help the economy, says Bob Gay, managing partner of Fenwick Advisers, based in Rye, N.Y. “It takes a little pressure off the consumer,” he says. “Beyond $100 a barrel is a delicate spot.”

Christian Science Monitor