Will Our Demand for Oil Ever Be the Same?
Oil is regarded as a volatile commodity because its cost has the ability to fluctuate greatly within a short period of time. Last July prices soared to record highs of over $141 a barrel, only to fall off to nearly $30 a barrel last December. After oil prices reached their peak, a massive pull off in consumer demand caused prices to fall. The experts say that with consumer demand still low, the price of oil could stand to drop even further below its current price at near $60 a barrel. One analyst has even predicted oil to touch down briefly at $20 a barrel:
Philip Verleger, a business professor at the University of Calgary and visiting fellow at the Peterson Institute for International Economics told CNBC’s July 8 “The Kudlow Report” how the cost of oil might drop. Verleger explained why the current price of oil – at $60 a barrel, off its $72 highs, is still way too expensive for the market and why it could come tumbling down to $20.
