Investing: Oil Hits $100
“The $100-per-barrel scenario, while it may not be reached this year, is likely to occur in the not too distant future. The supply-demand issue is not going away and the days of cheap oil are for the history books.” — Senior Oil Analyst Colney Turner on December 28, 2007
Colney Turner didn’t have to wait very long to see his forecast hit the headlines. On the first day of trading in 2008 (just five days after he spoke to the press) crude oil hit $100. This historic benchmark has long been the subject of intense speculation, but the momentum from last year is so strong that traders barely stopped to celebrate before predicting $150 oil. “This is the culmination of everything that we talked about last year,” MF Global Ltd. VP John Kilduff told Bloomberg. “Various geopolitical problems have deteriorated overnight, in particular Nigeria and Pakistan. Commodities, and in particular oil, have become safe havens in a dangerous world.” But will 2008 be as favorable to oil investments as 2007? It may be too soon to talk about $150 oil, but just about all the major tracking agencies are revising their price forecasts upward for the year. “What brought us here is still with us,” analyst Harry Tchilinguirian told Bloomberg. “The dynamic of strong winter demand, declining consumer country inventories, and geopolitical tension against a backdrop of tight spare capacity are all kept in place.”
Published Wednesday, January 2nd, 2008 at 9:06 pm and filed under Industry News.