Oil could reach $200 a barrel
As oil prices continue to shatter records, a Goldman Sachs analyst has predicted prices could rise as high as $200 a barrel.
As oil prices continue to shatter records, a Goldman Sachs analyst has predicted prices could rise as high as $200 a barrel.
"We believe the current energy crisis may be coming to a head, as the lack of adequate supply growth is becoming apparent," analyst Arjun N. Murti wrote in a client note.
The forecast pushed prices up further, as did concerns over the Iranian oil industry, which reportedly needs foreign investment to maintain production levels.
Brent crude rose to above $120 for the first time in London trading yesterday, while light sweet crude traded in New York also hit a record of $122.
"The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months," Mr Murti told his clients.
The investment bank predicted oil would soar above the $100 a barrel mark three years ago.
However, the analyst admitted the ultimate peak oil prices will reach, or the length of the current cycle, cannot be predicted with any certainty.
Concerns over supply, after a series of disruptions, combined with high demand from China and India are forcing prices up.
OPEC (Organisation of the Petroleum Exporting Countries) has also criticised speculators for pouring cash into commodities to protect against rising inflation, keeping the price of oil artificially high.
The high prices are filtering through to consumers. Petrol prices on May 6th were at an average of 110.6p for unleaded and 121.2p for diesel, according to petrolprices.com.
Meanwhile, the higher fuel costs are also affecting airlines. Low-cost carrier easyJet today posted a bigger first half lost on a £67 million fuel bill and claimed many of its competitors would not survive the rising prices.
