Oil prices are expected to remain high through early next year but eventually ease to the $40-a-barrel level, according to Michael Lewis, global head of commodities research at Deutsche Bank. "Under-investment in productive capacity, limits to refining capacity and the potential for further extreme weather events are sustaining a bullish price outlook for energy prices into 2006," he said in a news release about the Dow Jones-AIG Commodity Total Return index, which is up 16% for the year through Sept. 16.
"We see little chance of oil prices returning to the levels of the 1990s and envisage oil prices at $40/barrel over the medium term, or more than twice the average level of the 1990s," Mr. Lewis said.
In addition, gold prices are expected to remain strong, and base metals prices are also expected to remain above long-term averages.
In base metals, only copper is expected not to see higher prices next year because of a surplus.