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Will Oil Stay Low - 3/9/09

With oil down 73% from last year’s price of $147, it has been trading in the $30 to $40 range for months. Most experts believe oil will be weak with the possible modest price increasing by the end of the year.

North American energy analyst Mary Novak at IHS Global Insight believes it will certainly go lower.

Matthew Simmons founder of Simmons & Co. believes as OPEC cuts output and oil companies shelve expansion programs, an oil shortage is coming. He believes in the next few months we will have a sharp rebound in price. Oil companies don’t have projects in line that can get them ahead of their blind curve. Simmons says, “In measurable stocks, we are basically tight as a drum. Unless we have a sharp rebound fast, we’ll have an even steadier liquidation of useable petroleum stocks until it finally leads to shortages.”

Simmons believes that serious shortages could quickly triple or even quadruple the price within the next two years. He also believes within the next two to five years we will see $500 a barrel

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