'New era of oil prices' makes fall back to $30s unlikely: Caruso

'New era of oil prices' makes fall back to $30s unlikely: Caruso

Washington (Platts)--20Jun2006

The world is in a "new era of oil prices," with prices falling back into
the $30/barrel range, as had been expected as recently as last year, unlikely,
US Energy Information Administration chief Guy Caruso said Tuesday.

Caruso, speaking at the Center for Strategic and International Studies on
the EIA's newly released International Energy Outlook 2006 report, said the
agency had slashed its crude oil prices expectation through 2030 by 25%.

"Current WTI prices of $70/barrel will come down, but not nearly back to
the $25-$30/barrel range" that the EIA was forecasting last year, he said.

One of the biggest reasons for the EIA's upward price revision is that
"we just don't see investment being made in a timely enough manner," Caruso
said. "Substantial" impediments to investment exist worldwide, including lack
of access to resources in places like the US, and increasing moves toward
nationalization, particularly in South America and Russia, that threaten the
investment climate.

Caruso also noted that the cost of doing businesses in the oil industry
has surged in recent years, constraining investment. "The commodity boom has
made it difficult to get steel and to get rigs," he said. In addition there is
a shortage of skilled engineers and other workers, Caruso added.

--Cathy Landry, cathy_landry@platts.com

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