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Will oil prices increase further?

*Financial Times, by Sarah O'Connor, May 20, 2008

“Oil Price Heads Towards $130

The oil price reached a fresh record on Tuesday, surging towards $130 a barrel supported by fears of supply disruptions and a weak dollar in spite of suggestions that the US was beginning to wean itself off oil imports.

The latest jump in prices came as T. Boone Pickens, the legendary US investor, predicted crude would reach $150 a barrel this year.

Mr Pickens, who runs hedge fund BP Capital and is a proponent of the theory that suggests oil production has peaked, told CNBC that ‘speculators have nothing to do’ with high oil prices and said there was no bubble in the energy market.

Earlier analysts at Société Générale and Credit Suisse raised their 2008 and 2009 crude oil price forecasts.

‘Crude prices are being driven upward by a powerful combination of ongoing financial investor flows and strong fundamentals, both short-term and long-term,’ SocGen said.”

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