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from.– Oil Crisis...is
the world about to be shocked
Oil prices may see 'super spike'
BBC
Crude oil prices rose on Friday after a leading investment bank and
energy markets trader said that prices could eventually top $100 a
barrel.
Goldman Sachs said that the oil market may be in the early stages of a
"super spike", which could push prices as high as $105 a barrel.
It said strong global demand, allied to potential instability in oil
producing countries, could inflate prices.
US light, sweet crude rose 40 cents to $55.80 a barrel in Asian trading.
London's Brent crude, meanwhile, climbed 72 cents to $55.01 a barrel.
Consumption effect
Prices are now approaching the record high of $57.60 seen in the middle
of March.
This peak prompted Opec to lift production quotas by 500,000 barrels a
day.
In its report, Goldman Sachs said the possibility of political turmoil
in major oil producers such as Saudi Arabia could lead to a significant
rise in prices over the long-term.
The firm has raised its US price forecasts for 2005 and 2006 to $50 and
$55 a barrel from $41 and $40 respectively.
"Oil markets may have entered the early stages of what we have referred
to as a 'super spike' period," said Goldman Sachs analyst Arjun Murti.
This would result in "a multi-year trading band of oil prices high
enough to meaningfully reduce energy consumption and recreate a spare
capacity cushion only after which will lower prices return".
Tight supply
Prices have remained above $55 a barrel in recent days after data showed
that US gasoline stocks fell last week while demand was 2% higher than
this time last year.
Markets are also nervous about disruptions to supply after the recent
fatal explosion at BP's largest refinery in the United States and a
power failure which caused the closure of a Venezuelan refinery on
Thursday.
However, other analysts said it would require a major disruption in
supply to cause a spike in prices of such magnitude.
"The market is still of the mind that supply/demand is still very tight
but the fundamental situation is not nearly as bad as what current oil
prices would suggest," David de Garis, senior economist at ANZ
Investment Bank, told Reuters.
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