Oil Prices to Remain Steady, Natural Gas Prices Poised for Increase

In 2007 the price of oil will stay around $60 dollars a barrel, if there are no major upsets in the world, a University of Alabama engineering professor predicts.

“Anything that threatens the oil supply will drive the price up above $60 even though there may not be a real shortfall in oil supplies,” explains Dr. Peter Clark, associate professor of chemical and biological engineering at UA.

“Gasoline will increase in price in the late winter and early spring as the refineries shut down for maintenance. This normally results in a decrease in gasoline supplies and a short-term increase in gasoline price,” says Clark.

Clark says, assuming the world energy supplies remain stable, the price will begin to decline in late spring and early summer.

“The price of natural gas, and thus home heating cost, will depend upon the severity of the winter,” he says. “A cold winter will bring about an increase in the price while a warm winter, such as the one we had last year, will result in a price decrease.”

In addition, Clark warns, “Without major investments in offshore drilling and liquefied natural gas terminals, the long-term outlook for natural gas supplies is not good. This will be reflected in a steady increase in the price of natural gas over the next few years.”