$100 Oil Possible?

Even after rocketing up to $85 per barrel in mid-October, global oil prices could very well hit $100 by the end of 2008, as soaring rates of oil consumption in the world's leading oil-producing nations cut into their export capacity. This is the forecast of Jeff Rubin, Toronto-based chief economist for CIBC World Markets, speaking this fall before the sixth annual Association for the Study of Peak Oil & Gas conference in Cork, Ireland. The CIBC economic guru told conference delegates that the daily export capacity of OPEC, Russia and Mexico will drop by 2.5 million barrels by the end of the decade. "Domestic demand growth of as much as 5% per year in key oil-producing countries is already beginning to cannibalize exports, and will increasingly do so in the future as production [either] plateaus or declines in many of these countries," he says. Rubin points out that OPEC members, together with independent producers Russia and Mexico, now consume more than 12 million barrels per day, surpassing Western Europe to become the second-largest oil market in the world. For more on this, see the November issue of Oil and Gas Investor. For a subscription, call 713-260-6441.