Don’t hold your breath for a big drop in oil prices.
So says the International Monetary Fund. Its World Economic Outlook report, released Thursday, says oil markets are facing “a period of increased scarcity.”
The IMF blames surging growth in emerging markets such as China, the No. 3 global petroleum consumer, and India, the No. 5 user, at a time when big global suppliers such as Saudi Arabia are dealing with mature fields whose days of cheap and easy production are behind them.
“Improvements in oil supply have been slow, reflecting investment bottlenecks and other constraints, and the IMF expects net capacity will build only gradually,” the agency said.
The steady rise in fuel prices could threaten global growth, which is already confounding policymakers around the globe, with inflation threatening to take off in places like China and Brazil and debt traps looming in slow-growing developed economies in Europe.
A persistent adverse oil supply shock would imply lower global output, higher revenues for oil exporters, a surge in global capital flows, and a widening of current account imbalances.
None of this will come as a shock to those paying rising gasoline prices lately. But it does mark a bit of a shift at the IMF.
After rising just over 2% annually between 1992 and 2001, oil prices rose at an annual clip above 12% in the past decade, the IMF estimated in October. But at that point the organization was still seeing the energy-pricing glass as half full. The IMF predicted that the global oil price would rise just 3% in 2010 and a mere 1% in 2011, to $78.75.
The IMF hasn’t put out its latest forecast of global oil prices; the next round is due next week. But with West Texas Intermediate crude fetching $109 lately and the Brent crude trading in Europe above $120, it seems safe to say we’re not going to see oil prices below $80 any time soon absent a massive economic shock.
“The persistent increase in oil prices over the past decade suggests that global oil markets have entered a period of increased scarcity,” the IMF wrote. “Given the expected rapid growth in oil demand in emerging market economies and a downshift in the trend growth of oil supply, a return to abundance is unlikely in the near term.”
Unless you mean an abundance of complaints about high gasoline prices. Those aren't going anywhere.
Also on Fortune.com:
Follow me on Twitter @ColinCBarr.