Oil won't rise even as economy recoups: report

NEW YORK (Reuters) – World oil prices are unlikely to rise much even as the global economy rebounds, Oil Analyst Ed Morse writes in the next issue of Foreign Affairs.

Oil prices are unlikely to go above $75 to $85 a barrel, as world output capacity rises and demand stagnates after oil prices spiked to a record $147 last year, Morse, the managing director of LCM Commodities, writes in Foreign Affairs’ upcoming September/October issue.

OPEC kingpin Saudi Arabia has massively increased output capacity, which could help keep oil within the $40 to $75 a barrel range Morse claims is desirable for the Kingdom.

“There are good reasons to believe that lower prices are here to stay for a while,” writes Morse. “Last year’s high prices and the recession have severely damped demand, and the growth of new production capacity, especially in Saudi Arabia, is buoying supplies.”

Reuters