Wednesday, September 07, 2005

One consequence of Katrina-- Oil at $100

SINGAPORE (AFX) - Oil prices at 100 usd a barrel are no longer an unthinkable prospect in the aftermath of Hurricane Katrina and Asian demand is part of the reason, analysts said.

Predictions by US investment bank Goldman Sachs in March that oil prices could rise to 105 usd a barrel were widely ridiculed, but the damage unleashed by the US storm has made others now consider it a possibility.

Skeptics say oil prices are becoming a bubble just waiting to burst after striking a record high of 70.85 usd a barrel last week as Katrina hit oil-producing and refining areas in the southern United States, and there appears to be relief in the short term.

World oil prices retreated from 70-usd territory on Friday when the US government led a drive by major industrial powers to release emergency supplies of crude. New York's main contract, light sweet crude for delivery in October, fell 1.90 usd to close at 67.57 usd a barrel.

Asian Development Bank president Haruhiko Kuroda said in Singapore on Friday that 'I don't think 70 usd will be maintained, but how much and when prices start to decline no one knows.'

(the rest is at From the Wilderness)

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