Oil could reach much, much higher
A gas nozzle in the fuel port of a car.
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Stacey Vanek-Smith: But in a study out today, a British energy expert is warning crude could go back to the lofty levels we saw just a few weeks ago. From London, Stephen Beard reports.
Stephen Beard: Don't be fooled by the recent sharp fall in the price of oil, says Professor Paul Stevens. Long term, it's going head very much higher.
In a study for the British think tank Chatham House, Stevens says the world could face a major oil supply crisis in as little as five years. The problem, he says, is under-investment. Producer countries are starving their state-owned oil companies of cash. And the major international oil companies are too concerned about taking care of their shareholders:
Paul Stevens: They've been giving a lot of money back to shareholders in the form of higher dividends and buying back their own shares. And of course that is money that is going out of the investment pot for the industry.
A major global recession and a collapse in demand for oil would only postpone the supply crunch, says Stevens. He thinks crude prices could hit $200 a barrel within the next decade.
In London, this is Stephen Beard for Marketplace.