In a recent energy special report, Lehman highlighted two prime factors driving soaring oil prices, which reached $135 a barrel last week.
First, it says there is a perception of limited stocks and that peak oil production has been reached, mainly due to increased demand from China and India and a slowdown in production by non-Opec producers.
Second, it says there is a bel-ief that a price increase is nee-ded before oil production can cover escalating costs resulting from a weak dollar and expensive deep sea refining.
But senior analyst Michael Waldron says: “The end of the year and the first quarter of 2009 will be a turning point.”
The report says: “Through 2009, global production capacity should be growing at twice the rate of global demand.”
Lehman cites underestimates of Saudi, Nigeria and Northern Iraq’s potential to sustain and increase capacity combined with a 10 per cent growth in Russian production due to new domestic tax relief.