Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I think there is a danger of getting carried away with this. Whilst the supply conditions are tight, and the market is quite happy to price oil in the $52-58 price-range, the excess is due to external, "geopolitical" or environmental factors.

If the US, for example, bombs Iran then all bets are off - there is no way that prices will not skyrocket to the $150 or more level. If there is a major terrorist attack on key Saudi or Gulf oil facilities, then, again, the price will skyrocket. If there is a bad second half to the hurricane season and this knocks out Gulf of Mexico production, then $85-$90 per barrel is possible; if Winter comes early and there is a serious cold spell in the US, then $70-$72 is possible.

If, however, it just comes down to those boring supply and demand issues, coupled with a 15-20% risk premium, then we are looking at a trading range between $55 and $65 for the Autumn and into the first half of the Northern hemisphere winter. My best guess for the 31st December is $63.75 for Brent crude.

by londanium on Sat Aug 13th, 2005 at 10:23:47 AM EST

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