U.S. oil prices could sink to $50

U.S. oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.

But don’t expect a corresponding drop in gas prices.

Merrill analysts expect U.S. oil prices to still average about $90 a barrel over the same time period. Global oil prices meanwhile, which more closely dictate the price of gasoline in the United States, are expected to remain high as growth in global oil supplies lags population growth and economic output.

The drop in U.S. oil prices would likely be temporary, caused by the difficulty in moving huge amounts of new oil from places like North Dakota’s Bakken shale or Texas’ Eagle Ford to market. Already, all the new production has led to a glut of oil in the region.

“No one expected output to grow by a million barrels per day last year,” Francisco Blanche, Merrill’s head of commodity research, said at a press briefing in New York. “No one.”

Read more at CNN Money. By Steve Hargreaves.

Comments

  1. The Eagle Ford formation in Texas is close to refineries in Corpus Christi and Houston. Pipelines could be constructed to transport the crude to the refineries. However, any new pipelines could easily be delayed by government regulations. EPA seems to have taken over Section 404 of the Clean Water Act from the Corps of Engineers thereby making permitting more difficult.

    • Since when is trucking outdated? Or railroad? Pipelines would be much faster and more economical. We have to also realize obama is in the White House. he completely dislikes any new ideas such as pipelines. He already proved that with the pipeline from Canada to Texas.
      All the talk of leakage. I say ptptptptptptptptptpt. How many leaks do we hear of the Alaskan pipeline?

  2. have we ever heard of pipelines and gaging liberals since this is a national defense issue

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