Crude Oil Hits $121, Will Be $150-$200 Shortly, OPEC Daily Prices Back to $111.6

OPEC daily prices back to $111.6

www.chinaview.cn 2008-05-06 20:18:59

VIENNA, May 6 (Xinhua) --

The daily average oil prices of the Organization of Petroleum Exporting Countries (OPEC) jumped back to 111.6 U.S. dollars per barrel (dpb) Monday, the Vienna-based cartel said Tuesday.

The prices soared 4.61 U.S. dollars from the last trading day and closed only 0.06 dollars lower than the historic high set on April 28.

Experts said the drop in prices last week was only due to profit taking in the international market, adding that prices would continue to rise in the short term.

Meanwhile, Susilo Bambang Yudhoyono, president of OPEC member Indonesia, said Tuesday that his government was considering quitting the cartel as the country had become an oil importer.

He said at the opening of the National Development Planning Congress in Jakarta that Indonesia's short-term plan is to "increase domestic oil production".

The daily average prices of OPEC set a record of 111.66 dpb last Monday and kept dropping in the next three days. The prices once touched 105.99 dpb Thursday and slightly rebounded to 106.99 dpb Friday.

Editor: Du Guodong

"Super-spike" could lift oil to $200: Goldman

Tue May 6, 2008 1:32pm EDT

LONDON (Reuters) - Oil could shoot up to $200 within the next two years as part of a "super-spike" driven by poor growth in oil supplies, investment bank Goldman Sachs (GS.N: Quote, Profile, Research) said in a research note.

"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," Goldman said in the note made available to Reuters on Tuesday.

Oil hit a new record near $121 a barrel on Tuesday, continuing an advance which has seen it double over the past 12 months.

"The possibility of $150-$200 per barrel seems increasingly likely over the next 6-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," Goldman said.

Goldman, which was one of the first to point to a triple digit oil price more than two years ago, said it believed the market was approaching the crunch in the "super-spike".

The "super-spike" theory argues that a lack of adequate supply growth along with price-insulated demand growth in non-OECD countries will lead to a dramatic and continuous rise in oil prices that will ultimately lead to a sharp correction in oil demand.

Goldman analysts said the underlying drivers of the rise in oil prices remained firmly in place, noting poor growth in non-OPEC supplies, low OPEC spare capacity, restriction on foreign investment in key oil producing nations and healthy demand growth in non-OECD economies.

"In our view, a gradual rally in prices is likely to be longer lasting than a sharp, sudden spike," the note written by U.S.-based analyst Arjun Murti said.

Goldman said it had raised its spot oil price forecasts for U.S. WTI crude for 2008 through to 2011 to $108 rising to $110 and $120 a barrel, up from $96 rising to $105 and $110 respectively in its earlier forecast.

"We see risk to our 2008 and 2009 forecasts as distinctly to the upside," it said.

(Reporting by Santosh Menon)

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