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The price of oil has fallen from more than $140 per barrel in July to less than $40 in January, and gloom has overtaken the E&P business. Companies are reducing staff and suspending or canceling project plans as they attempt to adjust to the collapse in energy markets. Projects that were conservatively based on $60−$70 oil prices a few months ago no longer make sense. In addition, the world is facing a global depression, and oil demand is expected to remain low for some time, perhaps for years. Because of this, I believe that we are entering a time of great promise and opportunity for some.
This summer, most analysts predicted that oil prices would remain near or above $100/bbl, and a few said they would rise to $200. Now, the US Energy Information Administration (EIA) forecasts that oil prices will not reach $130 again (in 2007 dollars) until 2030. The gap between oil price predictions now and five months ago is a good reason to question, if not to ignore, all long-term forecasts.
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