Oil Prices: Here Come Tighter Oil Supplies, Higher Prices

It’s a classic good-news, bad-news scenario. First, the good news. Analysts are scouring data for signs that the economy may be bottoming out and oil types are seeing faint signs of firmness on the energy front. Now, the bad news. If the economy does start to get back on its feet later this year, it could get a repeat wallop from higher fuel prices. Forecasters are basing their hunch that oil is heading upward partly on mounting signs that the economic crisis and lower oil prices are shuttering projects around the world. OPEC countries—which meet next week to consider another output cut—have voluntarily slashed production by around three million barrels a day since last fall. But the big and lasting cuts are coming in non-OPEC countries, where companies are postponing or canceling projects in droves. Bernstein Research said this week that non-OPEC oil production could fall by 2.5 million barrels/day over the next year...Environmental Capital