Energy
Expert Predicts Oil Price Spike, But May Be Wrong
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The legions of experts who think oil prices will move sharply higher soon is increasing.
Part of the logic behind expectations of higher crude prices is that a long period of low prices has caused a sharp cut in exploration to replace production from older fields.
According to Reuters, Matt Simmons, founder of Houston-based investment bank Simmons & Co. said, “These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike.”
The argument against his point of view is simple. If the global recession gets worse, demand for crude could continue to plummet.
Douglas A. McIntyre
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