Building a world of
resilient communities.

MAIN LIST

 

Analyst expects oil may rise to US$75

Crude oil prices, which rose to a record US$55 a barrel in New York on Friday, may increase further and peak at US$75 a barrel, said Bernard Dan, president of the Chicago Board of Trade, the second-biggest US futures market.

"Given that some production is going on around the world, I can't see it much higher than US$75 unless there are disruptions in supply lines," Dan said on Nine Network's Business Sunday show in Sydney. "I think that the US economy is strong enough to absorb that."

Crude oil for delivery next month closed on Friday at US$54.93 a barrel on the New York Mercantile Exchange after reaching US$55 during the day, the highest since futures began in 1983.

Futures were boosted by comments from Federal Reserve Chairman Alan Greenspan, who said oil isn't high enough to slow expansion as much as in prior oil shocks. High oil prices helped push the US economy into recession in the 1970s and 1980s, and caused demand to plunge by 19 percent between 1978 and 1983, according to the US Energy Department.

While a rise to US$75 sounded significant, the majority of oil traders and consumers had "priced in that sort of range and while it may do some damage in terms of the economy and may be reflected in our equity market, I don't think it's going to be at a level where it's catastrophic," Dan said.

It's clear though that rising energy prices are creating concern in US equity markets, he said.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Tags:  

Peak Oil Notes - Aug 27

A midweek update. Oil prices fell sharply on Monday in response to another …

Deflationary Collapse Ahead?

Both the stock market and oil prices have been plunging. Is this “just …

My Chicken of an EV

A little over two years ago, my wife and I entered a new phase of life in …

In Clash of Greens, a Case for Large-Scale Solar Projects

Weaning the U.S. economy off fossil fuels will involve the wide deployment …

Why the $20 Oil Predictions are Wrong

As the price of West Texas Intermediate (WTI) retests the $40 per barrel …

Peak Oil Review - Aug 24

The great oil price slide of 2014-15 is taking on epic proportions.

Fracking Arrives in the UK

Fracking has finally arrived in the UK, eight years on from …