The record oil prices, peaking at US$79.45 a barrel, that were seen in 2006 are not expected to be repeated in the coming year but prices will remain high though 2007, Drive.com.au reports. The price will still be high enough though to annoy motorists and bring in fat profits for the oil companies. Prices in 2006 were influenced by Middle East tensions and the expectation of bad hurricanes, both of which are likely to have an impact on prices in 2007. Winter weather will also have an impact on prices in early 2007 as heating oil demand in North America drives up prices.
The strength of the U.S. economy and demand from China will have a longer lasting impact, both of which are expected to remain strong. The supply of oil will be influenced by continuing uncertainties in Russia and conflict in Nigeria - Africa's largest oil producer. The Organization of the Petroleum Exporting Countries (OPEC) plans to cut production to maintain the high oil prices allowing its members and other oil producers to continue to post record profits. Woodside Petroleum, Australia's biggest independent oil and gas producer, had a bumper 2006, posting a record net profit of $1.037 billion.