Barrel Prices Likely to Average $80 in 2008 Despite U.S. Downturn

The price of oil is likely to average $80 per barrel this year, $8 higher than last year's average, despite a recent downturn in the U.S. economy, analysts said Jan. 24.

Newedge commodities research firm head Antoine Halff said the prospect of a collapse in oil prices, like the one that drove oil to $10 per barrel after the Asian financial crisis in the late 1990s, is remote. In fact, energy traders are betting on historically high prices into 2010, paying around $83 per barrel for futures contacts that call for delivery of oil in two years, he said.

"The rally of the past few years seems like it is coming to an end," Halff said. "But does it mean we're reverting to the lows we had previously? There are other factors that are providing a floor to prices."