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High oil price 'may have peaked' according to oil and gas analysts

The peak price of oil may have passed, according to industry analysts Gaffney, Cline and Associates.

The firm said the drop in value of a barrel of oil from $145 in 2008 to less than $80 in 2014 was caused by supply significantly outstripping demand.

In a newly-released report, the Houston-based company warned the imbalance could lead to increased price competition among major oil producing nations.

Report author Barry Aling said: “Due to rapid demand growth from developing industrial economies and geopolitical disturbances there has been a five-fold increase in oil prices since 2000.

“It is tempting to assume that further price inflation is inevitable. However, there is growing evidence that the more recent decline in prices reflects changes in the pattern of global energy supply and demand which may mean that the price of $145.61 achieved in July 2008 proves to be a watershed high point.”

The development of unconventional oil in North America has added around five million barrels a day to global output, contributing to a 30% drop in prices during 2014.

But leading Aberdeen oil economist Alec Kemp said that while prices are likely to remain low in the near future, it is impossible to predict prices further ahead.

He said: “The price of oil depends on supply and demand. Demand has come right down and supply has gone right up because of technological advances so the price has come down.

“The peak has passed so far and it will be relatively low for the next few years, but who knows in 50 years time?”

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