$this->bbcode_second_pass_quote('', 'L')ONDON: The $100-a-barrel oil that Goldman Sachs Group said would prevail by 2009 may be only a few months away. Jeffrey Currie, a London-based commodity analyst at the world’s biggest securities firm, says $95 crude is likely this year unless Opec unexpectedly increases production, and declining inventories are raising the chances for $100 oil. Jeff Rubin at CIBC World Markets predicts $100 a barrel as soon as next year.
“We’re only a headline of significance away from $100 oil,” said John Kilduff, an analyst in the New York office of futures broker Man Financial. “The unrelenting pressure of increased demand has left the market a coiled spring.”
New disruptions of Nigerian or Iraqi supplies, or any military strike against Iran, might trigger the rise, Kilduff said. Higher prices will increase revenue for energy producers from Exxon Mobil to PetroChina Co, while eroding profit at airlines including EasyJet and railroads such as Union Pacific Corp. The US and other oil-importing nations risk accelerating inflation, while higher energy costs threaten to restrain growth.
Benchmark crude oil futures ended last week at $75.57 a barrel on the New York Mercantile Exchange, up 51% since mid-January and twice the level of early 2003. A record number of options have been sold that give the buyer the right to buy crude oil at $100.
The contracts, covering 50 million barrels, only pay off should oil go above the target price. Arjun Murti, a New York-based Goldman Sachs analyst who covers oil producers and refiners, roiled markets in March 2005 with a report saying prices could touch $105 a barrel during a ‘super spike’ period because demand was stronger than anticipated. Price swings might also go as low as $50, Mr Murti said at the time.
Currie, Goldman’s global head of commodities research in London, is predicting that oil prices will probably touch a record and stay at unprecedented levels for months or years. The all-time high for Nymex crude futures is $78.40 a barrel on July 14, 2006. …


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