Goldman Sachs Group previously mentioned that oil may be at US$100 or S$151 by 2009. Now that figure may just well be only a few months away.

In the Edge article dated 30 July, Jeffrey Currie, a London based commodity analyst, says that “US$95 is likely this year unless the Organization of Petroleum Exporting Countries (Opec) unexpectedly increases production” as at the moment, lesser oil inventories are creating demand, making oil more expensive.

As it is, oil on last Friday is at US$77.02, up $2.07 a barrel.

What could possibly contribute to the rise? 'Disruptions of Nigerian or Iraqi supplies, or any military strike against Iran,' says John Kilduff, an analyst in the New York office of futures broker Man Financial.

At the moment, Afghanistan's Taleban have captured 22 South Koreans and is currently in negotiations to release them on the condition that the Taleban's prisoners were also released. Events like these in countries with oil will affect the pricing as well.

The outlook: “when will the Saudi Arabia ramp up production,” says Currie, “Oil might slip to US$73.50 if Opec were to start producing more now.”

In the same article, it says that Opec will have a meeting in September. If it is then decided to raise output, there would be more supplies by the end of the year.

Its a huge deal that oil prices are going up faster than you can say 'rise'. Given other circumstances, Matthew Simmons, chairman of Simmons & Co, a Houston investment bank, says that the prices could even go up to US$200.

At the moment, we are facing a 'deficit', where there are more demand but lesser supply. As for now, let's do what we in our power. Go for 'world peace'.


Nurwidya Abdul

Labels: 22 South Korean, Iran, Oil, OPEC, Saudi Arabia, Taleban prisoners, US$100, US$200