Oil prices edge closer to $100-a-barrel

An expanding global economy fed by the insatiable hydrocarbon consumption of industrialised countries as well as Asia’s fast growing economies is witnessing a sustained and rising demand for oil.

With production capacities of petroleum exporters increasingly being questioned many are openly predicting a three figure barrel price. The margin of spare production capacity is already so narrow that the market jitters at the slightest interruption to any key source of supply.

Analysts say that a combination of two or three adverse developments on markets such as natural disasters, war, political crisis could easily send oil not just to $100 a barrel but substantially higher making last year’s prediction by Goldman Sachs of $105 a barrel look mild in comparison..

The current oil price of about $67 a barrel is slightly down on the record $70.85 set at the end of August, 2005 but prices have remained 50 per cent higher than one year ago.

AME Info