Chatham House Predicts $200 a Barrel Oil

A report by leading think-tank, Chatham House predicts that oil prices will increase to in excess of $200 a barrel in the next five to ten years, fuelled (pardon the pun) by a "supply crisis" devrived from companies and governments were failing to invest enough to ensure production. The only way the looming crisis could be averted is if consumption falls.

"In reality, the only possibility of avoiding such a crunch appears to be if a major recession reduces demand - and even then such an outcome may only postpone the problem. While the forecast is controversial and extremely bullish, even allowing for some increase in capacity over the next few years, a supply crunch appears likely around 2013. The implication is that it will quickly translate into a price spike although there is a question over how strategic stocks might be used to alleviate this. Only extreme policy measures could achieve a speedy response in boosting supplies and lowering oil prices - a move that is likely to be politically unpopular"
Professor Paul Stevens, "The Coming Oil Supply Crunch", Chatham House

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