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Commodities - USA - Farewell to $60 oil; Brace yourself for $80
SAN FRANCISCO,CAL,USA -MarketWatch, by Myra P. Saefong -July 7, 2006: -- Crude's back at record levels, with the $60-per-barrel price we saw just last year out of the picture for now, maybe even forever, and $80 oil a real possibility by the end of the summer... "Producers and consumers alike should get used to the fact that oil prices will likely never fall below $60 a barrel again," said Emanuel Balarie, a senior market strategist at Wisdom Financial... The front-month contract for crude futures closed at $75.19 a barrel Wednesday in New York -- the highest closing price ever -- and the price rally has not stopped there as a world of political turmoil, direct threats to production and supplies and a strong global appetite for oil come together to rattle investors' nerves... Scenarios that would prompt a decline in prices include a slowdown in U.S. growth and easing tension in regard to Iran, according to Jason Schenker, an economist at Wachovia Corp., who considers the threat of oil disruption from Iran the "biggest upside risk to oil prices." ... Other possible reasons for a fall back to $60 for oil: a demand decline or an alternative fuel source, according to John Person, president of National Futures Advisory Service... But right now, hybrid cars are not selling fast enough to replace the high gas-consuming SUVs and pick-up trucks on the road, he said, pointing out that car sales are so slow that manufacturers and dealers are offering 0% financing...
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