Rediff Business Desk

Mumbai, Jun 12: Barely a month after he stunned the world by saying that oil prices will soon cross $200 per barrel, Goldman Sachs' ace oil analyst Arjun N Murti is now predicting that $200 levels for oil are unsustainable, and the demand for oil will drop drastically pulling down its price to around $75 per barrel.

Murti is not alone in this prediction. The chief economist of Canada's National Bank Financial, Clement Gignac, also holds that oil prices are set to slip to $75 to $80 a barrel.

Speaking to a business magazine, Murti explained that supply of oil in the global market is not likely to rise anytime soon, as most nations are holding back from increasing oil output. Coupled with this, he said, the rising global demand for oil -- especially from India and China -- among other nations is adding to price pressure, leading to the surge in oil tags.

But soon the prices of oil will become untenable, leading to a sharp decline in demand and price. However, some analysts believe that some Organisation of Petroleum Exporting Countries might increase oil production easing the supply pressure and thus helping drive down oil prices.

Canada's Gignac is of the opinion that oil prices will be driven down with the slowdown in the global economy, slippage in growth in industrialised countries, and the plausible inability of China and India might to be able to offset high commodity prices.