Oil Prices Could Drop                     To $50 – Credit Suisse

The “Lolair” drilling platform from state oil monopoly Petroleos Mexicanos

(PEMEX) is seen off the port of Veracruz

The worsening economic situation in Europe could bring Brent crude prices down to $50 per barrel this year, according to research prepared by Credit Suisse.

­“Oil demand would deflate sharply following an acute crisis in confidence,” say Credit Suisse analysts Jan Stuart and Stefan Revielle. They predict the new phase of economic crisis to start over the summer, The Daily Telegraph reports.

The situation could become tougher than in 2008 as “global imbalances are worse and much of the available political and real capital has merely been squandered in the interim”.

OPEC member, Venezuela is calling for a cut oil production to support prices. “There is overproduction, and the economic situation is bad in the euro zone,” Rafael Ramirez, the country’s Energy Minister said in an interview. “The market has a lot of oil.”

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(ed. Deflation is the current worry … not inflation. Deflation (depression) cuts production in every market, thus it decreases the sale of oil [fuel]. This creates a glut of reserve oil and fuel which is being overproduced. This could feasibly bring prices down. Refined gasoline and diesel are some of America’s biggest exports now. America imports oil and then refines it and exports it.)

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