Higher Oil Prices Here to Stay

The Energy Information Administration has released its Annual Energy Outlook 2007 (Early Release). Unlike their 2006 forecast that I commented on last year, this year’s forecast has few changes. The EIA continues to forecast lower oil prices in the short-run, followed by gradually rising prices after about 2010. It took them four years to accept that higher prices appear to be here to stay. If oil prices keep rising as they have for the last five years, then I predict that by 2010 the EIA’s forecast will no longer show a short-run dip.


Walter is the Director of the Automotive Analysis Division of the University of Michigan Transportation Research Institute (UMTRI). He studies the adoption by consumers and automakers of new powertrain (electric, hybrid, clean diesel, fuel cell, alternative fuels), safety, and telematics technologies. Walter worked for General Motors for 9 years in sales forecasting, product development, marketing, and manufacturing (1993 found him on the floor of one of GM’s component factories). Prior to joining the University, he was Executive Director of Forecasting and Analytics for J.D. Power and Associates. He earned his doctorate in Economics from UCLA in 1983.

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  • Van

    The steady increase shown by recent data covers only the effect of moderate shortfall of supply, and does not address the phenomona seen in the 1973-4 crisis. Once everyone starts hording gas triggered by shortage of supply, we will have the “NO GAS” signs at every station and the block long lines and be willing to pay $5.00 a gallon. The question is will 20 KWH PHEV’s be available to provide a diversified transportation energy supply. I think not, I think the administration is acting like the Captain of the Titanic, sailing into dangerous waters without enough lifeboats.

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