Oil prices may eventually top record highs hit in 2008 above $147 a barrel in the coming years as the world economy recovers, a Deutsche Bank official said on Tuesday. As emerging markets resume growth once the recession recedes, global oil demand will recover and push prices to - and potentially beyond - last years record highs, said Theresa Gusman, the global head of commodities at DB Advisors, Deutsche Banks institutional asset management business.
"Once we get a recovery in demand, we are going to see oil prices return to those highs that we saw last year. The supply demand situation has not changed all that much," Gusamn said. Oil has dropped $100 from record highs hit in July 2008 over $147 a barrel as the global economic meltdown depresses demand for the fuel world-wide.
Oil prices surged seven-fold during a 2002-2008 rally in commodities markets, led by booming demand in emerging economies such as China. Gusman declined to give a time frame for recovery, but suggested it was more a long-term pattern. "Im not saying thats going to happen in the next two years, but over time we will exceed that level," she said.
Over the next year, prices are likely to remain in, or around, the $35 to $45 per barrel range, she said. Diesel prices are set to remain lower than gasoline prices as increased global refining capacity outside the United States leads to a surplus of diesel supply, Gusman said.
"Last year, diesel was at a massive premium, but now we are back to diesel being cheaper and we think it will stay there over the next several years," she said. Gusman picked copper as the best potential performing commodity coming out of the recession while supplies are constrained by a lack of spending. Historically, copper is the leading base metal to recover as economies break free of recession.
Comments
Comments are closed.