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Oil Prices Forecast to Reverse from Current Lows

The International Energy Agency predicts oil prices will climb substantially over the next 20 years, despite current trends.

In a report issued Wednesday the executive director of the IEA, Nobuo Tanaka, says "the era of cheap oil is over." The agency predicts the price of oil will average about $100 per barrel over the next seven years.

The group says energy demand will grow 45 percent by the year 2030, and that production must increase to support economic growth. But, it says current credit conditions may delay investment in production, which could lead to future supply problems.

Oil prices have fallen to their lowest level since March of 2007 on concern that a worldwide economic slowdown is cutting into short-term demand.

The price of crude oil for future delivery dropped below $58 a barrel Wednesday during trading in New York.

The oil cartel OPEC - the Organization of Petroleum Exporting Countries - may cut oil production again to help lift prices.

The group decided in October to reduce daily output by 1.5 million barrels. But OPEC president Chakib Khelil recently said the cartel could make another cut before the next scheduled meeting on December 17.

He says the ideal price of oil should be between $70 and $90 per barrel.

Some information for this report was provided by AP and Reuters.