Wall Street giants see oil rising

http://news.bbc.co.uk/1/hi/business/4165350.stm

Wall Street giants Goldman Sachs and Merrill Lynch have revised upwards their predictions for the price of oil.
Oil prices rose to a record of $67.10 a barrel last week on supply and refinery worries and there are fears that prices will not fall and may go even higher.
US light crude will cost an average of $67 per barrel this year, $13.50 higher than a previous forecast, Goldman said.
Merrill, meanwhile, expects to pay an average of $56 a barrel this year, up $6 from its earlier target.
On the horizon
Look to the long-term, however, and there is a divergence of views on what will happen to the price of oil.
In our view, recent strength has been driven by short-term supply disruptions and renewed geopolitical tensions
Merrill Lynch
Goldman Sachs expects that a barrel of US light crude will still cost close to $60 at the end of the decade.
While Merrill's global energy team also raised its forecasts for long-term US crude prices by 40%, it sees a more manageable price of $42 a barrel by 2009.
The difference in outlook is based on how they view investment by oil companies in coming years and how successful that spending will be on finding new fields and easing refinery bottlenecks.
"In our view, recent strength has been driven by short-term supply disruptions and renewed geopolitical tensions," Merrill's global energy team said.
"Longer-term, we believe $60 a barrel oil is unsustainable and expect prices to retrace."
US commodities guru Jim Rogers has told Reuters that oil will prices will soar upwards to $100 a barrel.
"I don't know about the next quarter or even next year...but it will go to over $100 a barrel," he said.
Mr Rogers, who sees strong oil prices as being based on strong demand and shortage of supply, pointed out there have been no great oil discoveries in "more than 35 years".
'People nervous'
In the current environment, however, any easing of prices seems likely to be short-lived.
After dropping on Wednesday following the publication of robust US stockpile figures, oil prices started climbing again on Friday after a blaze at a major Venezuelan refinery.
Crude oil prices rose following the fire at the massive Paraguana refining complex, which, combined with a halt in Ecuador's exports, and a reported blast at the Aqaba port of Jordan, was enough to give the market the jitters.
In electronic trading on Friday, a barrel of light sweet crude for delivery in September gained $1.33, to $64.60 per barrel.
In London, Brent crude gained $1.43 to $63.83.
Also suppliers in the Opec group of producing nations are pumping at their highest rate in a quarter century, with not much in the way of spare capacity to make up any shortfalls.
Ecuador, South America's fifth-largest oil producer, normally produces 200,000 barrels of oil a day, but has been hit by protests in Amazon provinces over the level of investment from foreign operators.
"The market is concerned about short supplies and even 200,000 barrels is able to make people nervous," said Dariusz Kowalczyk, a Hong Kong-based investment strategist at CFC Seymour Securities.