Oil prices: Risk of a fall?

Consensus forecasts predict lower oil prices next year, although a minority of analysts, sceptical that demand will fall, expect higher 2007 prices. Beyond 2008 the supply picture could be much tighter than generally thought, some experts say. Stella Farrington reports

Oil prices have plunged 30% since hitting all-time highs in July, and there is much talk that the bull run is over for the time being. Many analysts expect prices to continue falling next year on signs of a weakening US economy. 2008 could see a further fall in price as new supply hits the market. However, some analysts – most notably those at Goldman Sachs, UBS and Barclays Capital – expect higher oil prices in 2007. Looking further out, other experts believe it is highly unlikely the much