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increase production. These increases will largely be offset by declining production from several old fields - the North Sea, Alaska and Mexico. Even so, total global production should pick up in the second half of 2008, just as higher Asian consumer prices begin to slow consumption. Saudi Arabia has long argued that increasing Opec's production is pointless because the additional production would be of sour, heavy crude oil, for which the world lacks refining capacity. Many old refineries are designed to refine light, low-sulphur crude, whose production has been declining fast. The good news here is that Reliance will soon be commissioning its new Jamnagar refinery which can process 28 million tonnes/year of the heaviest, sourest crudes. Refiners in other countries have also been increasing their ability to process low-grade crudes. Production at some new fields like Saudi Arabia's Khursaniyah will be of light oil. This improving match between production and refining capacity should help cool prices. Hopefully, Reliance Industries will also start producing gas from its giant Krishna-Godavari field in the second half of 2008, though the dispute with Anil Ambani may cause delays. This gas will substitute oil in fertilizer and power production, and increased gas-based electricity should reduce the use of diesel gensets. Finally, ethanol production is rising. US production of corn-based ethanol is projected to rise from 0.42 mb/day in 2007 to 0.58 mb/day this year and 0.64 mb/day in 2009. Brazil's production is expected to cross 0.35 mb/day. So, ethanol production is heading for a million barrels/day, reducing petrol demand correspondingly. Corn-based ethanol has been criticized for raising food prices, but it also dampens petrol prices. For these reasons, i predict a modest rise in the production of and modest cooling of the demand for oil in the second half of 2008. That should suffice to bring the price down to $100/barrel. That is not exactly low. And it may go up again if the world economy grows strongly in 2009. But let us be thankful for any decline, even a temporary one. My prediction could be wrong for several reasons - a US/Israeli attack on Iran, terrorist attacks on US oil installations, hurricanes in the Gulf of Mexico that destroy oil platforms. But let me not take refuge in ifs and buts. Let me stick my neck out and shout, "Oil at $100/barrel." Retrieved June 22, 2008 from http://timesofindia.indiatimes.com/articleshow/msid-3152735,prtpage-1.cms