Oil may fall again says analyst who predicted '09 rebound

The current oil shock caused by the boom in U.S. shale production is reminiscent of the mid-1980s, when development of fields in the North Sea and the Gulf of Mexico caused a supply glut, Kenney, the head of European oil and gas equity research at the Spanish bank, said by phone from Edinburgh Thursday. It differs from the 2008 collapse, which was caused by slumping demand in a recession, Kenney said, Bloomberg reports. "My gut feel is that the oil price could see a double bottom," Kenney said. "We've got too much inventory" and the recent price rebound may not have taken fully into consideration the supply glut, he said. The price of oil collapsed about 60 percent from June to January as the Organization of Petroleum Exporting Countries maintained production and the U.S. pumped at the fastest pace in three decades. A plunge on a similar scale happened almost 30 years ago, when crude dropped from about $30 a barrel in November 1985 to less than $10 four months later. A two-month rebound to $17 was followed by second dip to near $10. West Texas Intermediate, the U.S. benchmark, has recovered about 12 percent from its Jan. 29 low as oil companies have idled a record number of drilling rigs and cut spending. U.S. output continues to rise and the nation's stockpiles of crude increased to 434.1 million barrels last week, the most in weekly data starting in 1982, according to the Energy Information Administration.

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