Goldman Sachs Expects Oil Prices To Hit $200

The same analyst for the company who predicted 100 dollar oil three years ago believes oil will hit the 200 mark within 24 months.  This is a financial goldmine for investors.  But it's also frightening in more ways than just the price of gasoline...

More below the fold:

From the Financial Times:

Analyst warns of oil at $200 a barrel
By Javier Blas and Chris Flood in London
Published: May 6 2008 18:58 | Last updated: May 6 2008 18:58
Crude oil prices could surge to $200 a barrel in the next two years, according to the Goldman Sachs analyst who three years ago correctly predicted a price “super-spike” above $100 a barrel.

The warning by Arjun Murti came as oil prices hit a fresh high above $122 a barrel, boosted by supply disruptions in Nigeria, lower output in Russia and continued robust demand in China ahead of the Olympics.

EDITOR’S CHOICE
In depth: Oil - Apr-29

Oil hits above $120 amid Nigeria concerns - May-05

Oil price rises lift BP and Shell - Apr-29

Oil majors rebuked for lack of openness - Apr-27

BP plans to invest $560m in biofuels - Apr-24

UN says oil rise hits food prices harder - Apr-26

Mr Murti said the energy crisis could be coming to a head as a lack of adequate supply growth was becoming apparent.

He said: “The possibility of $150-$200 per barrel seems increasingly likely over the next six to 24 months.”

He added that the spare capacity of the Organisation of the Petroleum Exporting Countries to cushion against unexpected supply shocks was very low.

The other links within the article make it more apparent how dangerous this situation is for the world political balance and for things beyond the work commute.

The term stagflationary abyssal is becoming more precise than even I thought.  In the 1970s, the CW was that the best investments you could possibly make were oil or gold.  They were the best value.  

Oil surged 20% in only a few months from when oil reached 100 dollars as Jerome a Paris had predicted. That's better than stocks average in their best years, let alone a stumbling economy.

For oil to go from 100 to 200 will make a lot of investors really happy, if it does not entail an economy where ordinary people can prosper and thrive.