Lehman is now predicting prices at $83 a barrel in 2009 and as low as $70 in 2010.
Although some years off, Brazil too has found as much as 8 billion barrels of light oil and gas offshore. The South American giantís president says his country might well join OPEC when the Tupi field begins to pump, in 2011.
In addition, Middle Eastern sovereign wealth funds have pushed up the oil price by investing billions of their oil gains, ironically, in commodities index funds.
Now they could be looking to get out, warns Waldron. He figures the money effect has driven anywhere from $20 to $30 into the barrel price.
In addition, a weak dollar is holding oil prices high, according to a series of statements from OPEC leaders over the past week.
If you buy the views of OPECís various leaders, thatís at least another $20 of oil price that is not supported by the actual supply and demand situation.
In addition, Europeís central bank seems bent on containing inflation there. A rate increase in Europe is sure to contain the euroís rise against the dollar ó if serious steps are taken soon.
Couple that with a lower-than-expected rate cut in the U.S. next week, or perhaps no cut, and the oil price drops as the dollar gains ground.
All this is having little immediate impact now, of course. U.S. gas prices at the pump hit $3.58 a gallon just as the summer driving season kicks off.
If nothing changes, analysts now expect gas to rise to as high as $4 a gallon in as little as a month.