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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (1795)	8/17/2005 2:48:21 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24212

The Oil Price to Be Scared Of Jad Mouawad, NY Times Once upon a time, not too long ago, the prospect of crude-oil futures hitting $50 a barrel sent waves of anxiety over consumers, business executives and politicians, evoking the specter of gasoline rationing, not to mention a global recession and general economic mayhem. Today, the $50 mark is a mere dot in the rear-view mirror and the economy keeps growing at a healthy clip. Is there another benchmark - a new number that everyone is scared of? For now, the number to watch is $86. In early 1981, when the Iraq-Iran war caused an oil shock, a barrel of oil cost the equivalent of $86 in today's dollars. That number still seems a long way away, and OPEC is promising to pump itself dry to meet demand. But consider this: it has taken less than eight months for oil prices to jump by $20 - from $46 to $66. Over the last year, oil prices have increased by 54 percent. In the past week alone, futures on the New York Mercantile Exchange rose to a record - $67.10 on Friday - the highest since crude oil began trading on the exchange in 1983. At this rate, oil prices might hit $86 a barrel sometime next spring. Last month, Goldman Sachs predicted that prices could reach $80 a barrel if a hurricane were to destroy production platforms and pipelines in the Gulf of Mexico, which accounts for a quarter of American production. And other worries abound, including growing tension between Iran and the West, the possibility of more pipeline bombings in Iraq, civil unrest in Nigeria, oil worker strikes in Venezuela and, most devastating, the fear of an attack on Saudi Arabia's oil industry. While the economy stayed upright at $50 a barrel, few economists are predicting the same for $80 and up. Here is another number to worry about. Back in March, Arjun Murti, an analyst at Goldman Sachs, made a bold prediction: oil markets had entered a "super spike" period, he said, and if supplies were interrupted, the price of a barrel of oil could rise to - take a breath - $105. (14 August 2005) energybulletin.net