Crude oil won’t fall from $50 any time soon: U.S. Energy
WASHINGTON, (May 30, 2005) — The U.S. Energy Department predicts that summer diesel prices will average $2.24 US a gallon and crude oil prices are likely to stay above $50 a barrel this year and in 2006.
Despite high prices, worldwide demand for petroleum will remain high, although demand growth in China seems to be easing.
Worldwide spare crude oil production capacity has recently diminished and is projected to remain low, while freight rates in the trucking industry are historically high.
Furthermore, geopolitical risks, such as the continued insurgency in Iraq and growing political unrest in oil-producing countries like Nigeria and Venezuela, are expected to keep “the uncertainty premium” placed on oil high.
— from Heavy Duty Trucking
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