Collecting a mix of crude oil and water last week from an old well in East Java, Indonesia. The miner sells the oil at up to $28 a drum.
LONDON: The price of oil hovered near a new high of $130 a barrel Tuesday as investors continued to ignore the prospect of more supply this summer and instead focused on bullish forecasts from investment banks and the influential oilman T. Boone Pickens.
Traders were encouraged to add to their positions after Pickens said he expected crude prices to reach $150 a barrel this year.
The investment banks Credit Suisse and Société Générale also raised their forecasts for average oil price for 2008.
Light sweet crude for June delivery rose to an all-time high of $129.60 a barrel on the New York Mercantile Exchange. In London, the benchmark Brent crude futures contract was up $2.15 at $127.21.Last week, the most active investment bank in the energy market, Goldman Sachs, helped to push the oil price above $127 a barrel when it predicted prices would average $141 in the second half of this year.
Olivier Jakob, of the trade advisory company Petromatrix, called it the fundamentals rule, "but the question is whether the futures market should reflect the fundamentals of the next few months or of the next few years."
NVDL: Fundamentally prices have to go up. Because the demand is growing faster than supply is growing, and supply growth is no longer a certainty. It's simple economics. And against a background of an ever increasing world human population, with each new individual an additional consumer of resources, an additional user, well, even more demand strain on a finite resource. Think about mould on a piece of bread. The mould can become seemingly infinite in number, mushrooming on the bread, but eventually the resource is consumed and all the mould can do is grow, feed on itself. Eventually very little is left.
Oil Soars Beyond $129 After OPEC Warns It Won't Increase Output
Credit Suisse raises 2008 oil price forecast to $120/bbl from $91/bbl
Oil close to $130 after buying surge
The cost of oil was today poised to break through the $130-a-barrel barrier for the first time after supply shortages and forecasts of high prices for years to come
NVDL: It would be interesting now to provide the encyclopedia of data where so many so-called experts predicted oil prices of what, $80 this year, or $65? They were so far wrong it's a joke. They've been dreaming. We all have. Unfortunately, we awaken on not a pleasant day, and with the news of terrible weather approaching. We are ill prepared.