Oil Expected to Stay Above $100 This Year

Fed agency ups forecast as world laps up Texas tea
By Greg Atwan,  Newser User
Posted Apr 9, 2008 6:43 AM CDT
Crude oil traders work in the half empty pit on the floor of the New York Mercantile Exchange, in this Feb. 21, 2008 file photo.    (AP Photo/Stephen Chernin, file)
camera-icon View 2 more images

(Newser) – A barrel of crude could end up averaging more than $100 this year, federal handicappers are predicting, just weeks after the triple-digit mark seemed like a troublesome anomaly. OPEC’s parsimony with its reserves, spiking demand worldwide and a dwindling supply outside the Middle East are conspiring to squeeze rates—and last month’s record close of $110.33 might not be the worst of it.

But the Energy Information Administration also prophesied that prices would stay below $4 at the pump, as demand eases in a coming downturn. The oil price watershed is fueling Washington acrimony, notes the Wall Street Journal. Republicans are blaming high corporate taxes, while Democrats suspect speculators may be rigging prices by driving down refinery use.