Major: Oil Prices to Drop Within Six Months

SAN DIEGO - Former British Prime Minister John Major said he expected oil to drop to close to $20 a barrel within the next six months.

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In a Nov. 1 speech before members of the American Trucking Associations, Major said part of the reason for price increases was a lack of tanker capacity and a logistical problem where “tankers were in the wrong places at the wrong times.”

He said he expected the price decrease because Organization of Petroleum Exporting Countries are now shipping one million barrels per day more than the world is using.

The nations of the world are more interconnected than most realize, Major said. The United States’ own presidential election, set to come off a week from Major’s address, will impact not just the nation but the entire world, he said.

Major then highlighted many of the changes that have occurred and continue to occur in Europe, and how they affect the world at large. While most celebrated the end of the Cold War and the fall of Communism, it actually means more wars are likely to happen, Major said. Explaining that the war in the former Yugoslavia would have never happened if not for the fall of the Soviet Union.

When asked about oil prices, Major said there is little governments can do to influence production decisions by other countries. “But, what governments can do is control taxes,” he said. “As prices rise, taxes could be reduced to stabilize the price. Instability is almost as damaging as the price itself.”