NEW YORK (MarketWatch) -- Oil prices of at least $100 a barrel are expected to become the norm as early as next year, as conventional supplies continue to decline and consumption in the developing world rises, CIBC chief economist Jeff Rubin said Tuesday.
"We're in a world of triple-digit oil prices for the foreseeable future," Rubin said at the CIBC 2nd Annual Industrials Conference. "Whether it's $100 or $140 a barrel ... is up to debate, but the bottom line is we're in the bottom of the ninth inning of the hydrocarbon age."
Rubin said higher oil prices will spur technological innovations, as well as growth in nuclear power and biofuels.
"I'm not sure in 50 or 60 years, oil will still have the role in the global energy market that it does today," he said.
Rubin said more of OPEC's production will go toward fueling its own energy needs.
Despite Wall Street's obsession with oil consumption by China and India, oil use in Russia, Mexico and the OPEC nations outpaced the world's most populous country last year.
In Venezuela and Saudi Arabia, for example, the retail cost of gasoline ranges around 25 cents a gallon -- cheap enough to consume in ever-larger quantities to fuel growth.
At the same time, oil-rich countries such as Kuwait and Mexico are starting to see declines in major oil field supplies, he said.
By 2012, Canadian oil sands could become the single largest source of new oil supply for the U.S. as Mexico's supplies become depleted, he said.
Recent oil sands acquisitions by Royal Dutch Shell (RDSA:royal dutch shell plc spons adr a
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MRO 57.41, +0.39, +0.7%) could be the "harbinger of things to come," he said.
Six of the largest oil suppliers to the U.S. are poised to cut their global exports by nearly 2 million barrels a day by 2012, Rubin said.
The projected cut -- amounting to 7% -- by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia, "reflect the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption," Rubin said.
Canada's oil sands production is expected to increase to 2.3 million barrels a day by 2015, up from about 1.1 million barrels a day in 2005, according to the U.S. Energy Information Administration.
Rubin's remarks come as big oil companies such as Exxon Mobil (XOM:exxon mobil corp com
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XOM 92.24, -1.71, -1.8%) continue to forecast plenty of fossil fuel to for the world's needs by at least 2030. See full story.
Steve Gelsi is a reporter for MarketWatch
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