Report suggests higher gas prices

NEW YORK, Jan. 10 (UPI) -- New York-based CIBC said U.S. consumers should prepare for gas prices hitting $4.50 a gallon.

Global oil supply cannot keep up with demand anymore, according to an energy report from CIBC World Markets.

The report suggests that rapidly increasing demand in developing economies like China and India, combined with depletion of existing supply, will cause supply of global oil to fall as much as 8 million barrels per day below U.S. Department of Energy and International Energy Agency estimates by 2012.

"Those projections ignore two fundamental forces that have, in recent years, brought global production to a virtual standstill," says Jeff Rubin, chief strategist and chief economist at CIBC World Markets. "The first is depletion. You have to run faster to stand still. The second is the huge project delays and massive cost overruns."

In the United States, soaring crude oil prices are blamed for pushing the cost of gasoline to a high, Rubin predicts, of $4.50 a gallon.