Enough Wealth

60 Minutes on Oil: Did Anyone Verify Anything?

The EAI report predicts oil prices to average $51 in 2009. But that price was cut from $63.50 in just one month and could drop further, so below $40 in the short term doesn't seem unreasonable.
"WTI prices are expected to average $51 per barrel in 2009 (Crude Oil Prices), down from the $63.50 projected in last month’s Outlook."

Unfortunately the EIA projections are dependant on how good their guess is for 2009 global GDP. They had revised their previous month's forecast significantly:
"World real gross domestic product (GDP) growth is projected to slow from about 4 percent in 2006 and 2007 to about 2.7 percent this year and 0.5 percent in 2009. Last month’s Outlook assumed world GDP would increase by 1.8 percent in 2009."

I'd guess that there is more downside GDP risk than upside. The EAI, however, only seem to focus on potential for growth to surprise on the upside, which suggests they are biased towards the upside for oil prices in 2009-2010

"If the world economy recovers sooner or is stronger than EIA now anticipates, oil consumption could decline at a slower rate or potentially increase instead, putting upward pressure on oil prices."

Lower (or negative) global GDP in 2009 could see production oversupply for many months, which would see spot oil prices plumb new depths. It would be a great buy for the longer term, but I'll be cautious about buying for the long term just yet.