Analyst Lynch Predicts $90 Oil Soon, But Falling Crude and Heating Oil Prices in 2010
Michael Lynch. (image: cnbc.com)
During a segment on CNBC’s Squawk on the Street Thursday, Strategic Energy & Economic Research president Michael Lynch predicted a near-term rise in crude oil prices, followed by relief come spring next year. “I think we could see 85 – 90 [dollars] based on the momentum we have before it peaks out, but especially by next spring at the latest we’re going to see a lot more downward pressure on prices,” Lynch said.
Lynch noted that although the economy is recovering, there is a lot more oil coming online around the world, growing the supply while demand is not likely to keep pace. Specifically Lynch cited the improving situation in Nigeria, which could add as much as a half million barrels to the market per day, and expanding oil production in Iraq.
There is also “the probability that the dollar will bottom out [and] will likely push prices down at the end of the year,” he said.
Also on Thursday, Lynch spoke with 22 News in Springfield, MA about the possibility of increasing short-term heating oil prices. “I think home heating oil is going to go up another 5 to 10 cents a gallon in the next few weeks but hopefully that will be the peak and by the time the cold weather hits it would be 20 cents below that,” Lynch said.
Lynch’s predictions are on target with other recent reports of heating oil prices being set for a fall due to high supply and low demand.
Watch both of Lynch’s TV appearances below:
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Tara says: says:
Interesting. I’m wondering if our economy will be able to handle $90 per barrel when (arguably) we’re skimping by on $78 per barrel now.