Finotec News Archive - May 07 2008
Crude passes $122 a barrel to hit all time record
a weak dollar, supply fears in Nigeria and northern Iraq along with increasing demand bringing renewed fears of rising costs for consumers and damage to the wider economyTammy Wall
07 May 2008
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Oil prices broke new records yesterday when they passed the $122-a-barrel mark, brought on by a weak dollar, supply fears in Nigeria and northern Iraq along with increasing demand bringing renewed fears of rising costs for consumers and damage to the wider economy. A new prediction from Goldman Sachs that oil prices could rise to $150 to $200 within two years provided much of the buying impetus yesterday. Arjun Murti, an oil analyst at Goldman Sachs, said in a research note that prices were in the grip of a "super spike" but one that would ultimately force demand to fall sharply. Tim Evans, of Citigroup, predicted prices could easily fall to $40 a barrel as rise to $200 because supplies were "comfortable".
Another problem is that the Iranian petroleum industry needs foreign investment and, despite the country’s vast oil and gas reserves, is struggling to maintain production levels, according to industry experts. Although Iran is Opec’s second-largest exporter, production at the country’s leading oil and gasfields is believed to be falling by as much as 10 per cent annually because of a lack of investment and expertise.
Finotec Analysis Team
07 May 2008
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