11 August 2008
Energy experts are split as to whether falling oil prices are here to stay or whether recent reductions are just a temporary blip in an upwards trend. Prices have fallen from a record high of $147 per barrel in July following fears that slowing growth in the US and across Europe will squeeze demand.
Investment bank Lehman Brothers forecasts oil to fall back to $93 a barrel as OPEC increases supply amid softening demand. Energy market data published last month showed for the first time since February 2007, investors believed oil was no longer a good long-term investment.
"There is greater cause for optimism than at any other time in the past 12 months," said Damien Cox, senior energy analyst at John Hall Associates. Global Insight oil analyst Simon Wardell believes oil could fall to $80 a barrel over the next 18 months, but warns these prices are not here to stay. See feature in 4 september issue