OPEC President: $200 Oil on the Horizon?
Reuters is reporting this morning that the cost of oil could hit $200 per barrel. Citing a story in the Algerian government newspaper, El Moudjahid, the news agency quoted OPEC President Chakib Khelil saying, ""In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geo-political problems and the fall of the dollar, the prices of oil would not be at this level.
He added: "The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
Only a few months ago economist were predicting the return to $40 per barrel oil. Today, with the price per barrel close 20 percent higher this year alone, I am watching for oil to hit $125 per barrel within the next few months.