‘Crude oil may fall below $80 on weak demand’

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Oil prices may drop to below $80 a barrel by the end of the year because of weakening demand and could fall even further next year, the Center for Global Energy Studies said.

"It will go slowly down further because the world economy is heading for the rocks, there are clearly big problems,'' Leo Drollas, deputy executive director at the Center for Global Energy Studies, said on Wednesday in an interview in Amsterdam. "Forget even about $70 a barrel next year if there's a major recession." Crude oil has plummeted 40% from its July record of $147.27 as the worsening global financial crises threatens to restrain economic growth and energy demand. On Tuesday, Opec members Libya and Qatar called on the group to cut production in an attempt to stall the slide in oil prices.

"The Saudis are probably really worried now, this is not the time to keep prices at $90 or even $80 a barrel," Drollas added. "The Saudis probably will let it slide, their rock bottom price is $65 a barrel according to our calculations."

London-based Center for Global Energy Studies was founded by former Saudi Arabian oil minister Sheikh Ahmad Zaki Yamani.

Opec will discuss production levels for the first quarter of 2009 at a meeting in Oran, Algeria, on December. 17.

Drollas doesn't expect an emergency meeting before then and said Opec might agree to cut production at that meeting.