Bank predicts oil
price fall
ABC Rural -
Monday, 21/07/2008
An Australian bank is predicting the price of oil will fall
significantly by the end of the year, as supply and demand adjust to the
current high prices.
Suncorp group treasury strategist,
Peter Pontikis, says oil will come back to around
$US100 a barrel and then stabilise at $US70 a barrel
in subsequent years.
He says the price of oil in US dollar terms has overshot the
mark and the current level is simply unsustainable.
"It's naive to assume that consumers will put up with
the price at these elevated levels and not do anything about it," he says.
"I think they will respond in both immediate demand, so they'll curl back their discretionary spend on
oil, and they'll also look for substitutes whose costs are far more south than
where current levels are."
abc.net.au