However, worldwide demand will remain strong, he believes. “We’re not really seeing demand destruction at these prices levels,” Flynn said. In February, for instance, global oil consumption hit a monthly record of 87,069 million barrels of petroleum products. And demand in the U.S., for instance, was 21.6 billion barrels a day, 5.4% more than a year ago.
Goerz, chief investment officer at Highmark Capital, points to geopolitical forces as sources of risk. And he predicts that as prices continue to rise, demand will ease: “Last winter everyone was running around turning down their thermostats,” he said. “Obviously we’re trading in our big SUVs for more efficient cars.”
Expect oil to trade between $55 to 65 per barrel for the rest of 2007, Goerz said.