We all know oil consumption is rising again.
Thanks to stronger-than-expected economic growth in Europe and Asia, OPEC has upped its oil consumption forecast for 2011. OPEC believes global consumption will reach nearly 87 million barrels per day next year.
Recently, even the IEA raised its global oil demand forecast again — this time by 0.2 million barrels per day, which puts their projected 2011 demand to 88.5 million barrels per day comparing with the 87.3 million barrels per day projected for 2010.
Although those levels are nothing to boast about, remember that production is still around 86 million barrels per day. Going forward, we can count on that gap widening.
So in 2011, it’s likely that we’ll see the return of $100/bbl oil.
But that certainly doesn’t mean oil prices will average $100 per barrel for the year. Making that mistake could be costly.
We expect to see prices staying between $75-$90/bbl, a little higher than the $60 to $85/bbl range we saw in 2010.