Wednesday AM November 12th, 2008

With crude oil dipping below 60-dollars a barrel, some energy analysts say that price is lower than it should be. Jack Williams reports.

image of oil barrel Barbara Shook is with the Energy Intelligence Group and says the sub-60-dollar oil is under-priced.

“Oil prices are below where they ought to be. On a fundamental basis, they probably should be somewhere between $75 and $100 a barrel. We just don’t know because we had so many moving parts.”

Oil hadn’t dipped below $60 dollars a barrel since early 2007. Just a few months ago, it was selling for $147 a barrel. Shook says much more of a price drop might not be good.

“At some point, the decline has to stop. I would hope it stops soon so, one, we keep the refiners in business, and two, that we don’t have this relaxation of conservation that we saw when gasoline did hit $3.50 and $4.00 a gallon.”

Shook says once the global markets come into some sort of balance, we’ll likely know where oil prices will settle for a while.