By Grant Smith
May 21 (Bloomberg) -- Oil rose above $130 a barrel for the first time after at least five banks raised price forecasts in the past week on expectations supply constraints will persist.
Crude oil for July delivery gained as much as $1.40, or 1.1 percent, to $130.47 a barrel, the highest since trading began in 1983 on the New York Mercantile Exchange. It traded for $130.22 at 11:56 a.m. London time.
Oil prices are likely to carry on rising, futures prices show. Crude for delivery in December 2016 surged $17.08, or 14 percent, in the three trading days after Goldman Sachs Group Inc. raised its forecast to $141 a barrel for the second half of the year. Yesterday, Societe Generale SA and Credit Suisse raised their forecasts for prices.
``You see more money going into the back end of the curve,'' said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Swizterland. ``The issue is not the fundamentals. What's bullish is the comments from people like Goldman Sachs.''
Brent crude oil for July settlement climbed as much as $2.08 cents, or 1.6 percent, to reach a record $129.92 a barrel on London's ICE Futures Europe exchange. The contract traded for $129.05 a barrel at 11:01 a.m. London time.
U.S. stockpiles of crude oil, gasoline and distillate fuel probably gained last week as refiners increased production and took delivery of crude imports, a Bloomberg News survey before today's Energy Department report indicated.
``You probably have more pension-fund type investment with a long term view that helped bid up the back of the curve as far out as 2016,'' said Harry Tchilinguirian, an analyst at BNP Paribas SA in London. ``This is supporting prices at the front-end in addition to current tight fundamentals in the oil market.''
The U.S. Energy Department will release its weekly inventory report at 3:30 p.m. in Washington.
Thursday, May 22, 2008
Oil Rises Above $130 a Barrel as Banks Increase Price Forecasts
Just because Goldman Sachs analyst proven rightly oil did surpass US $ 100 prediction, everyone begin to believe they will be proven right again to surpass US $ 200. Some guys - very smart guys - bid up the price up all the way to 2016, 8 years ahead. I think I say it best when I say nothing at all, just like what the song lyrics say.