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There's no way that the US would bomb Iran in October - you just have to look at the pattern of attempts to bring the Iran issue to the boil at the IAEA meetings during the September to November time frame; it got deferred every time as there was a hurricane on the horizon!

My default position with regards to the current oil price is that the market will bear the $55-$65 price range quite happily.

If the Iran bombing scenario is discounted as highly unlikley, then the principal risk factors are either climate or pipeline sabotage. Obviously, if the Bush administration does do the dirty then all predictions regarding outcomes go haywire, as we will be in uncharted territory. There was a period in late October when my 2  key factors combined, with the removal of 350 kbpd from Iraq to Turkey due to some spectacular pipeline sabotage, that has only recently been rectified, and approx. 1.1 mpbd were offline due to hurricanes. Fortunately the hurricanes took out refineries as well, thereby reducing demand for crude! The big difference next year will be the BTC pipeline which should be able to deliver an additional 1 million bpd to the world market, unless it gets sabotaged ( difficult as it is largely buried ).

It's possible that there will be a new top during the summer should there be another hurricane season; I'm, reliably informed that these are annual events. My top for the year will be $72.50 for Brent crude, and the end of year will be $62.00 for Brent crude.

The natural gas price will depend on how the rest of the winter pans out: if it's normal then the price pressure will remain on the upside, and there will be supply problems as the year progresses, mainly due to the current gap with UK supplies that is unlikely to close before 2007. If it remains warmer than the long-term average then the prices should be about 10-15% less. I'm guessing at a high of $29.00, with an end of year price of $22.00.

We will not see oil at $100 per barrel in 2006.

by londanium on Wed Dec 28th, 2005 at 11:47:34 AM EST

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