The price of oil looks set to rise further as political factors limiting investment will join rising demand and a weak dollar among factors pushing up prices, analysts told CNBC Wednesday.
"China is going to be demanding more oil and other commodities as well. Commodities are also getting a kick from the weakness of the dollar," Neil Atkinson, senior consultant at KBC Financial Services told "Worldwide Exchange."
If US consumers are hit by another surge in gasoline prices, "that could be disastrous for the US economy next year," Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ, said.
In a report, the Organization of the Petroleum Exporting Countries slightly raised its forecast for growth in oil demand for next year but said fuel consumption may not return to pre-crisis levels.
OPEC's estimate for 2010 oil demand growth is now 750,000 barrels per day (bpd) from a projection of 700,000 last month.
Even if oil prices find a balance, big oil companies still do not have access to many areas of the world where there are investment opportunities, so they can't find new oil and supply is constrained, Atkinson said.
Iraq was now more or less open to investment by foreign companies, but there are countries such as Venezuela and Iran, and to some extent Russia and Mexico, where oil majors can't invest because of political reasons, he added.
"There isn't really a free market where people with the money, who want to invest, could go to where resources are, extract the resources and supply the world with energy," Atkinson said.