Most oil price pundits expect prices to moderate from current 21-year peaks next year and to fall further by 2010, a Reuterspoll found today.
A survey of 14 analysts and consultants forecasts that US crude prices will slip to $30.12 a barrel next year, down 18 per cent from a $36.77 average so far in 2004, on course to be the highest level since 1980.
Prices have ballooned this year as rapid demand growth in China, low US gasoline inventories and worries over supply security in the volatile Middle East prompt heavy buying from big-money investment funds.
The rise caught many forecasters by surprise and most analysts ultimately expect prices to fall back as Middle East political tensions ease and new capacity eases strains on the global supply system.
"Hopefully we will be going into 2005 with a more comfortable inventory level and we shall see a better balance in the gasoline market," said Commerzbank analyst Mr Steve Turner.
Eight analysts with projections for 2010 on average forecast US crude at $26.81 a barrel, down from a mean of $29.22 so far this decade, though a marked increase on the post-1990 average of $22.68.
The average forecast for 2010 goes down even further if Barclays Capital's exceptional forecast of $43 is stripped out.
Predictions at the lower end of the range focus on expected supply growth in OPEC producers Iran, Iraq, Algeria and Nigeria, as well in non-OPEC provinces such as Russia, Central Asia and West Africa.