Money Story

05 September 2008 07:56 BST

Oil prices could reach $200 a barrel

Wednesday, 07 May 2008 15:43

Oil prices could be set to rise to $200 a barrel claims analyst

Printer friendly version

Free brochures

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. End of story

More money news...

Also In The News

World economy has 30% risk of stalling
The world economy has a 30 per cent chance of slowing sharply in the next two years, according to a report. Full Story

Standard Life beats first quarter forecasts
Insurer Standard Life said sales rose eight per cent for the first quarter on better-than-expected UK and Asia-Pacific performances. Full Story

Aegon completes Chinese asset management joint venture deal
Aegon has completed its asset management joint venture with China's Industrial Securities after regulatory authorities approved the deal. Full Story

Money Story

Oil prices could reach $200 a barrel

Free brochures

Also In The News

World economy has 30% risk of stalling

Standard Life beats first quarter forecasts

Aegon completes Chinese asset management joint venture deal