MercoPress. South Atlantic News Agency

Analysts warn of oil at 100 US dollars a barrel

Texas light crude reached a new record in New York and ended Friday's trading at 57,27 US dollars per barrel pushed by a strong surge in gasoline prices as well as a Goldman Sachs report warning the cost of a barrel could shoot to over 100 US dollars.

Intermediate Texas May contracts jumped 3,4%, establishing a new record since oil began trading in New York's MEX in 1983.

Towards the end of Friday trading the barrel actually reached 57,70 US dollars surpassing the previous record of March 17.

In London Brent crude closed at 56,51 US dollars the barrel, above mid March peak prices thus establishing a new record.

However it was the Goldman Sachs report which rattled markets, warning that strong global demand allied to potential instability in oil producing countries could inflate prices eventually to 105 US dollars a barrel.

In the report political turmoil in Saudi Arabia is specifically mentioned as a potential trouble spot which could lead to a significant rise over the long term.

Goldman Sachs raised the average US price forecasts for 2005 and 2006 to 50 and 55 US dollars a barrel up from 41 and 40 US dollars.

Oil markets may have entered the early stages of what is referred as a "super spike" period, which could result in a multi year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after will lower prices return.

More immediate concerns that have kept prices above 55 US dollar are the latest gasoline stocks data in the US indicating that they are 2% below last year, disruptions in BP largest refinery in United States and power cuts in Venezuela which affected processing activity.

Furthermore there is another labour dispute looming in Nigeria besides the always volatile situation in the Middle East.