World crude oil prices are expected to stay high through 2007 because of strong petroleum demand, limited surplus oil production and refining capacity and concerns about supply disruptions due to geopolitical risks in countries like Iran, the U.S. Energy Information Administration said.
The EIA said none of these “forces that contribute to current high crude oil prices will ease significantly in the near future, so our best forecast is that crude oil prices will remain elevated through 2007.”
The Energy Department’s analytical arm also said in its weekly review of the oil market, “Strong growth in the world economy, and particularly in China and the United States, has fueled the need for more oil, thus putting upward pressure on prices.”
U.S. oil prices have stayed above $70 a barrel also due to fear among traders that the West’s dispute with Iran over its restarted nuclear program could disrupt that country’s oil exports and a large part of Nigeria’s oil exports remains halted because of militant violence.
“The situation in Nigeria may continue for many months (and) market concerns about a possible supply disruption from Iran are likely to remain through at least this year if not into next year,” the EIA said.
