Wednesday, May 7, 2008

More Perdictions of $200/barrel crude coming

Another energy analyst is predicting oil going up to $200/barrel:

Crude oil prices could surge to $200 a barrel in the next two years, according to the Goldman Sachs analyst...He said: “The possibility of $150-$200 per barrel seems increasingly likely over the next six to 24 months."

Last month, Chakib Khelil, president of Opec, also warned oil could reach $200 a barrel. The number of oil option contracts betting on oil hitting $200 a barrel in December has tripled since the beginning of the year.

[click here for entire story]

This prediction is an even shorter timeframe than the previous one I posted here last week. We might see this price in 2 years, or less. Yikes!

The further mention of oil future contracts increasing is significant, because if market players are buying futures contracts at $200/bbl, that means that someone is actually betting real money on that price - which provides an indication that the analysts aren't just blowin' smoke. Of course, when you have the president of OPEC supporting the prediction, that is hard to ignore.

$200/bbl would translate into a retail pump price of $8-10 gallon. Oh boy.