The price of a barrel of crude oil could drop as low as $80 by next summer, Stephen Schork, editor and publisher of the Schork Report, said Monday on Al Jazeera America‘s “Real Money” program.
West Texas Intermediate oil futures traded at about $95 on Monday, down almost $20 since the beginning of September, when markets grew skittish about the possibility of a U.S. attack on Syria to quell its use of chemical weapons.
Lower oil prices would be a boon for the limping U.S. and world economies, and help reduce costs for the transportation industry. Fuel is one of the top two operating costs, along with labor, for transportation providers.
The average national price of a gallon of gasoline is $3.26, but in some parts of the country regular unleaded fuel is under $3 a gallon. The average retail price of diesel fuel is $3.85 per gallon, down 15 cents from a year ago, according to the U.S. Energy Information Administration.
U.S. refineries are in their maintenance period, and demand for petroleum is low, which should keep oil prices in a holding pattern barring unforeseen geopolitical events, Schork said. Refineries are expected to ramp up production soon, but the winter grades are cheaper to blend.
The big driver for a continuation in lower oil prices is the amount of new oil production in North America and the amount of pipeline and railroad capacity coming on line to deliver crude to refineries, Schork said.
Analyst sees $80 oil next year
