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Money and Markets predicts $150 oil by end of 2008

December 28, 2007

The Money and Markets newsletter predicts $150 oil by the end of 2008, in comparison to a price prediction of $105 per barrel from Goldman Sachs and $85 from the Energy Information Administration.

The International Energy Agency released a report projecting a severe energy supply shortage by no later than 2015. The report warned that increasing energy demand in India and China would result in an oil shortage of up to 7 million barrels of oil per day.

Global annual consumption of 85 billion barrels, is expected to reach 118 billion barrels by 2030. Matthew Simmons, a Houston oil and gas investment banker, told the Associated Press that the price of crude oil is likely to reach $300 a barrel. Oil prices reached a record $98.62 per barrel last month.

In China, fuel riots have occurred because of shortages. The shortages are affecting Shanghai, the southeast coastal provinces, and are spreading to the interior. Diesel is fixed-priced at $2.42 in China, about one third of the price in European markets, and fuel companies are getting squeezed by soaring crude oil costs, leading to production cutbacks and allocations. Prices have not been raised for 17 months despite crude oil rices nearly doubling.

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    Written by Jim Lane · Filed Under Consumers & Fleets 

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