Ali al-Naimi said prices could plummet if an economic crisis drives industrialized nations to find other sources of energy, citing the 1980s - when oil prices dropped by 80 percent after such nations reduced their dependency on oil and turned to alternative energy sources. [Editor's Note: In April 2004, Financial Intelligence Report predicted that oil prices would skyrocket from $29 per barrel to over $60 within 12 months. That forecast was dead on! Find out what FIR thinks oil will do over the next 12 months. Go here now.]
"Global economic growth may not continue at the same good momentum for years to come," al-Naimi said at the opening of a four-day conference of Arab energy ministers in Amman. "We should be careful and not take expectations as indisputable, especially the continuation of big demand for oil and its prices remaining at the same level or increasing," he said.
Al-Naimi also cited the Asian economic crisis of 1997-1998, when oil prices fell by 50 percent, slowing Arab oil production.
"Some are even concerned about a looming economic problem because of the increased policies of economic protectionism, or what is known as economic nationalism,"al-Naimi said, referring to Western countries' determination to become less dependent on Middle Eastern oil.
Sixty percent of the world's oil reserves lie in Arab countries, one third of global production comes from Arab sources and 40 percent of all oil business is conducted by Arabs, he said.
Global oil prices fell but finished last week roughly $2 a barrel higher, as traders' concerns about geopolitical threats and refinery snags outweighed evidence of rising supplies and forecasts calling for weakening global demand.
Crude futures dipped toward $72 a barrel Friday after the International Energy Agency reduced its 2006 world oil demand forecast. Earlier in the week, the U.S. Department of Energy said domestic gasoline supplies increased for the second straight week.
For more on this listen to Talk Show America 5/17/2006
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