NEW YORK - Oil prices will fall to $70 a barrel by 2015 as new production begins in countries such as Azerbaijan, Canada, Brazil, and Kazakhstan, the US Energy Department said.
The price of oil, which closed at $134.55 a barrel yesterday, will "ease somewhat in the medium term," the department said in its International Energy Outlook 2008. Oil will then rise to $113 a barrel by 2030, as the market remains "relatively tight." In last year's report, the Energy Department projected oil would be above $59 a barrel by 2030.
Prices have almost doubled in the past year, reaching a record $139.89 on June 16, partly on concern that world oil production will fail to keep pace with surging demand in countries such as China and India.
"Over the next five to 10 years, the high prices will bring on new supplies that should put downward pressure on price, but we're not going back to the historical low prices we saw in the 1980s and '90s," Guy Caruso, head of the Energy Information Administration, said yesterday.
World energy consumption will rise 50 percent between 2005 and 2030, the department said in the report, released yesterday. Demand in developing countries will increase by 85 percent. Growth in Organization for Economic Cooperation and Development countries will increase by 15 percent.
The Energy Department report also included a "high price" projection, which calls for oil to rise to $186 a barrel by 2030.
"Given current market conditions, it appears that world oil prices are on a path that more closely resembles the projection in the high price case than the reference case," the department said.
Oil for August delivery fell $2.45, or 1.8 percent, on the New York Mercantile Exchange. Oil for delivery in June 2015 closed at $134.04 a barrel on the exchange yesterday.
Production of liquid energy sources, including oil, will grow to 112.5 million barrels a day by 2030, up from 84.3 million barrels a day in 2005, the department said.
The 13 members of the Organization of Petroleum Exporting Countries will supply 40 percent of world oil output throughout the period of growth.
"The reference case assumes that OPEC producers will choose to maintain their market share of world liquids supply, and that OPEC member countries will invest in incremental production capacity," the department said.
Global natural gas consumption will rise to 158 trillion cubic feet in 2030, up from 104 trillion cubic feet in 2005, the department said.
"Natural gas is expected to replace oil wherever possible," the department said. "Because natural gas combustion produces less carbon dioxide than coal or petroleum products, governments may encourage its use to displace the other fossil fuels."