Oil prices, gasoline costs to double

OTTAWA — Crude oil prices will soar to more than $200 (U.S.) per barrel over the next five years – driving Canadian pump prices to $2.25 a litre and forcing a fundamental transformation in the North American economy, says Jeff Rubin, chief economist with CIBC World Markets Inc.

In a new report, Mr. Rubin forecast a continued run-up in crude prices, despite a slowing world economy and slumping petroleum demand in United States, the world's leading oil consumer.

He said he expects crude prices – now trading at above $116 (U.S.) a barrel - to average $150 by 2010, and more than $200 by 2012. That would translate into pump prices of $7 (U.S.) per gallon in the United States, and $2.25 per litre in Canada, double the current levels.

“Whether we are already at the peak of world oil production remains to be seen, but it increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity,” the economist said.

Click to expand...

Oxyminoan said:

Oil prices are rising because of increased use and depleting resources? No way.

Click to expand...

Automatic Jack said:

That's weird, because Lehman Brothers just told us that oil production is up, gasoline production is up, demand is slumping, the high prices are driven by speculation, and the bubble will soon burst, bringing it back down to $60-80/bbl (still 400% the pre-war price).

Maybe they're both right.

Click to expand...