More Bad News: Oil to "Super-Spike"... to $105/Barrel?!

According to a Goldman Sachs report (this article also lifted from Drudge).

What the hell is there to say about this, except-- gulp?

This would be bad. This would send us into Carter-like recession. Maybe worse.

Phil Flynn, senior market analyst at Alaron.com, said $105 oil is technically possible but not likely for at least 3 years and only if a major supply disruption, such as a halt to imports from Saudi Arabia, occurred.

'The timing of the report was conducive to the rally,' Flynn said. 'It's just another reason to be long. There's no doubt we're in a new bull market for crude oil.' Hear audio interview.

John Kilduff, energy risk analyst Fimat USA, agreed that the $105 price assumes a major supply disruption in Saudi Arabia or a Venezuelan embargo on shipments to the U.S.

'I don't know how they get to that number, short of a significant supply disruption event occurring,' he said.

'It's more reflective, to be fair, of the psychology of the energy market right now that there's going to be tremendous demand growth in the late third and the fourth quarter of this year. That's going to put the producers of crude oil in an extremely challenging position in terms of meeting that demand, and that's what is being priced in right now.'

posted by Ace at 05:25 PM

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