Oil prices are likely to hit $150 a barrel this summer season according to the Jeffrey Curries, the global head of commodities research at Goldman Sachs. This will happen mainly because tighter supplies outweigh weakening demand. Goldman Sachs is the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago, so its predictions should be treated very seriously. What is even more worse, this investment bank predicts that oil is also very likely to shoot up to $200 within the next two years as part of a "super spike".
This forecast has been building the number of supporters as on June 6th 2008 oil soared by more than $11 a barrel on Friday, which is its biggest one-day gain ever, reaching an all-time high of $139.12 per barrel. Though the demand for oil is still not that strong as it is expected in winter, supplies are very weak, and every disturbance in oil market, no matter how small it is, influences significantly vulnerable oil price. Another investment bank Morgan Stanley said on "horrific Friday" that crude may reach $150 by July 4 due to robust Asian demand and falling inventories.
Oil prices will reamin high and unstable as long markets remain poorly supplied, and our only chance against skyrocketing oil prices is well functioning market where supply and demand are balanced, which insures stable prices. This, of course will be difficult to achieve, mainly because market has become too sensitive as the latest mounting tensions between Israel and Iran showed by raising the oil price by more than $11 a barrel on Friday.
