LONDON, Dec. 3 -- An Oxford University professor said on Wednesday that the price of oil might be on a medium to longer term declining path.

Oil has fallen since June to reach its lowest since October 2009 on Monday. The two oil benchmarks touched five-year lows, with Brent dipping to 67.53 U.S. dollars a barrel and WTI touching 63.72 U.S. dollars.

"There will almost certainly be price spikes, but as with the price spike during the first Gulf War in 1990, it would be a mistake to confuse spikes with trends," said Dieter Helm, Professor of Energy Policy at the University of Oxford.

Helm said the recent price falls was "all about supply and demand".

On the demand side, a rise in price over the past 15 years has reduced oil demand and prompted energy efficiency measures across the world. Chinese demand for all commodities has tailed off as the economy was slowing.

On the supply side, the development of shale oil and gas has transformed world energy markets.

Helm said the oil price falls would stimulate oil importing countries' economy, but shock major producers. There also would be a big change in the relative costs of current generation renewables and a negative impact on nuclear.

Professor Helm is also a member of the Economics Advisory Group to the British Secretary of State for Energy and Climate Change.

He said the future energy policy should not be grounded in an asymmetrical and self-serving assumption that prices can only go up.

"In due course, low prices will increase demand and reduce supply, but cycles take a long time in energy markets to work themselves out, and in the meantime technical change might radically change the game," said Helm.