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Are you ready for $80 a barrel
01 April 2005
The price of oil has gone through the roof again. Why? Michael Halls reports.
The omens aren't good. The New York Mercantile Exchange
reported mid-March that an option with a strike price of $100 a
barrel had been traded for the first time. Just a week
previously the acting secretary general of OPEC talked up the
price of oil by warning that a barrel of oil could cost $80 a
barrel in two years' time. And serious newspaper reports in
both the US and the UK have speculated that that $80 price
might be seen sooner rather than later.
"The climate is ripe for speculation," says Paul Bednarczyk,
an oil analyst at 4Cast, an economic consultancy. "Even though
the fundamentals don't necessarily support it. There is plenty
of evidence to say that prices should be falling — US
inventories are 10% larger than a year ago, OPEC production is
higher and, although demand is slightly greater than forecast,
there are few dangers of shortfalls."...
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