Trend: Increasing demand and more expensive supplies will increase the cost of oil.
A Yahoo! Finance article describes the causes behind the gradual increase in oil prices. The good news is ... alternative energy technologies will become more attractive as the price of oil rises. Excerpts below.
Oil prices could top $100 a barrel by the end of next year and remain above that point for years to come, the chief economist of Canadian investment bank CIBC World Markets said on Oct 2.
Rubin expects Mexican oil imports to the U.S. will dry up by about 2012. Some of that decline will be made up by imports from other parts of the world, but the lions' share -- nearly a third of all U.S. oil imports -- will come from Canadian oil sands, he predicted.
But replacing relatively easy-to-refine liquid crude with petroleum from oil sands is certain to increase costs, he said. By the end of the decade, Canadian oil sands are likely to represent the world's largest source of new oil supplies, he said.
"We're basically replacing low-cost oil with high-cost oil," he said.
Looking ahead, Rubin expects crude oil prices to average as much as $90 a barrel next year, rising to around $100 by the end of 2008. That would represent an increase of nearly 25 percent over Tuesday's settlement price of $80.05 a barrel for light, sweet crude on the New York Mercantile Exchange.
via John Robb