Oil Could Halve to $50: Pros

Aliza Medina, Associate Producer|CNBC
Thursday, 14 Jun 2012 | 6:33 AM ET

Could oil prices continue their downward path? A recent report from Credit Suisse predicts that oil could hit $50 per barrel in the case of a severe credit crunch.

Looking at a worst-case scenario – namely, a repeat of the slowdown of 2008’s Great Recession precipitated by a crisis of confidence involving Europe - the analysis argues that demand would fall along with trading activity and that any recovery would be “halting fragile and painfully slow.”

The report points to the fall in oil prices witnessed in 2008, when Brent prices plunged from a record high level in the space of a few months.

The analysts explain that the $50, “end is near” scenario “is simply a fatalistic repeat of history on the premise that what was broken three to four years ago has not been fixed."

"Indeed, global imbalances are worse and much of the available political and real capital has merely been squandered in the interim,” they added.

Gasoline's Tipping Point
Looking at the commodities markets and what's likely to happen with US energy demand, with CNBC's Kate Kelly; Tom Kloza, Oil Price Information Service; and Paco Underhill, Envirosell founder & CEO.

Given the still-plentiful supply and U.S. dollar strength in this scenario, Credit Suisse forecasts a price recovery around $80 by 2013.


Contact Technology


    Get the best of CNBC in your inbox

    › Learn More
  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.