At Platts Energy Podium, EIA Chief Says Oil 'Could' Fall Below $100

    WASHINGTON, Aug. 26 /CNW/ -- Crude oil prices "could" fall below $100 per
barrel over the next 18 months on slowing worldwide demand and an increase in
oil production, Energy Information Administration (EIA) chief Guy Caruso said
    Caruso made the comment to reporters at the Platts Energy Podium in
    "I think [prices] could fall below $100 a barrel on slowing global demand
and rising production in the US, Brazil and Canada, and from OPEC states such
as Saudi Arabia and Angola," Caruso said.
    While Caruso said "most of the risk is on the upside," and that it was
not the official EIA prediction, he added that a scenario of falling oil
prices is "now closer to 50-50" if worldwide spare production capacity
continues to increase from the current 1.5 million barrels per day (b/d) to
3-4 million b/d while global oil demand softens.
    "That scenario is now more realistic than any time in the past five
years," said Caruso, who will leave EIA in September.
    A decline in oil prices also "opens up the possibility of conflict in
OPEC" as the producers' group debates whether to trim output, Caruso said.
    EIA earlier this month said it expected oil to remain at $120 to $130/b
in 2008. Crude oil prices reached a record $147.27/b on July 11. Prices have
fallen more than 20% since then on waning demand.
    Caruso also reiterated that releasing oil from the Strategic Petroleum
Reserve, or the home heating oil reserve, would have little effect on prices.
"I think it would be more valuable to save it for real emergencies," he said.
    House Speaker Nancy Pelosi and other Democrats, including Senator Barack
Obama, the presumptive presidential nominee, have urged releasing about 70
million barrels of crude oil from the nation's emergency reserve, about 10% of
the US supply, to cut gasoline prices.
    Caruso said that even if oil prices continued to fall, it would be
unlikely that many policies, such as the Renewable Fuels Standard, which
requires the use of 9 billion gallons of biofuels in the US in 2008, might be
rolled back or reduced.
    "There's no going back," he said. "We're near a tipping point here."
    Caruso said that the debate in Congress over more drilling in the Outer
Continental Shelf and the Gulf of Mexico as well as reining in oil speculators
also had little to do with the decline in crude oil prices. Increasing oil "by
small increments over long periods of time doesn't have a lot of impact on
    Sponsored by Platts, a division of The McGraw-Hill Companies, Platts
Energy Podium provides an ongoing forum for prominent newsmakers and the press
to address important energy and environmental issues. Members of the media may
receive complementary registration for Energy Podium events by contacting
Nancy Covey at 202-942-8719, A recording of the Guy
Caruso session is available via podcast at .
    About Platts: Platts, a division of The McGraw-Hill Companies (NYSE:  
MHP), is a leading global provider of energy and commodities information. With
nearly a century of business experience, Platts serves customers across more
than 150 countries. An independent provider, Platts serves the oil, natural
gas, electricity, emissions, nuclear power, coal, petrochemical, shipping, and
metals markets from 17 offices worldwide. Platts' real-time news, pricing,
analytical services and conferences help markets operate with transparency and
efficiency. Traders, risk managers, analysts, and industry leaders depend upon
Platts to help them make better trading and investment decisions. Additional
information is available at .
    About The McGraw-Hill Companies: Founded in 1888, The McGraw-Hill
Companies (NYSE:   MHP) is a leading global information services provider
meeting worldwide needs in the financial services, education and business
information markets through leading brands such as Standard & Poor's,
McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The
Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8
billion. Additional information is available at .

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