On the bright side

From The Informed Reader: Is Oil headed for a Crash?:

John Cassidy has a message for consumers who are contemplating giving up their SUVs to save on gasoline: not so fast.

Oil prices, which have hovered near record levels this fall, are to set plunge 50% or more in the next two or three years, says Mr. Cassidy in CondeNast’s Portfolio magazine. The downturn could be even steeper after that — $30 a barrel oil is a distinct possibility in the not-so-distant future, he says.

Mr. Cassidy bases his prediction on one essential idea: that the steep rise in crude prices over the past four years has been prolonged enough to fundamentally alter the behavior of both oil producers and consumers.

He certainly isn’t alone in anticipating a retreat in oil prices – many economists have forecast a pullback from the lofty $90-$100 a barrel levels of the past few months to $70-$85 next year as producers ramp up output to meet demand and a slowing U.S. economy reins in consumption. But most oil watchers also say that burgeoning demand from big developing economies like China and India will keep prices from falling too far.

There you go. Good news.