No oil price drop on horizon: economist.


A senior economist says the price of petrol is unlikely to drop for the rest of the year.
Motorists in some capital cities in Australia are paying up to $1.48 per litre for petrol.
Prime Minister John Howard has expressed hope that the price of crude oil will fall in the medium-term and drag the cost of petrol down with it.
However, Commonwealth Bank chief economist Craig James predicts world oil prices will stay at current levels or go even higher.
"Oil prices may rise even higher than that particularly if you get an escalation of violence in the Middle East, particularly if you get a new hurricane going through the Gulf of Mexico and disrupting suppliers," Mr James said.
"We're on the knife-edge in terms of the supply-demand balance for crude oil, and it only takes a small even to send things over the edge."