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April 01, 2005

Route 666

Oil prices rise amid fears market could hit $105 mark

OIL prices climbed higher today, sticking stubbornly above the $55 a barrel mark, supported by a forecast that the market could spike as high as $105.

Prices have climbed nearly 30 per cent this year as the strain on world supplies from booming Asian economies such as China and India ignited heavy buying from big-money speculative funds. In morning trade today, United States light crude traded up 38 cents to $55.78, moving back toward the record high of $57.60 struck on March 17. London’s Brent crude climbed 61 cents to $54.90 a barrel.

Goldman Sachs warned yesterday that the oil markets might have entered the early stages of a "super spike" period, which could drive prices toward $105.

"That was a pretty big call by them [Goldman Sachs] and the market is just assessing where supply and demand really sits," said David de Garis, senior economist at ANZ Investment Bank in Melbourne.

"The market is still of the mind that supply/demand is still very tight, but the fundamental situation is not nearly as bad as current oil prices would suggest," he added.

Forgive the extended cut/paste. Trying to save you the trouble.

Scare tactics? trying to get those oil futures buyers to panic a bit and jump in now for some quick profit-taking? Possibly. But I feel certain that today's pain at the pump will feel like a relaxing massage compared to 2-3 years from now.

Gotta run now and shop for my hybrid vehicle quick, because rumor has it our Congressional Heroes & Heroines may yet eliminate the tax credit for buying one. I'm looking for more on that story.

The Humvee tax credit, of course, will stay in place -- what are you, some kinda non-troops-supporting Communist?

Posted by Jeff at April 1, 2005 06:45 AM