Price of oil ‘will hit $100 a barrel’

OIL prices fell back yesterday from the records hit last week of over $60 a barrel as markets waited for the latest update for oil stock inventories due today.

One expert warned that at $60 a barrel oil is looking cheap at the price.

He says we are looking at $100pb in the not too distant future.

However, after hitting new record highs, prices eased yesterday, raising hopes that they might start to ease back to more moderate levels.

But in a new book due out this week, Matt Simmons, a Texan oil banker, contends prices will go to $100 a barrel and higher as growing global demand outstrips supply.

In a bleak scenario, the Texan warns the rush for oil could plunge the world into war.

Others disagree with that prognosis. The Economics Intelligence Unit expects oil to have peaked by the end of the year.

It has linked that forecast to a dip in demand from China, whose economic growth rate is slowing.

In 2006, the unit is forecasting a 10% dip in oil from current levels but that still leaves oil prices well above $50 a barrel.

In Ireland, the Economic and Social Research Institute expects oil to fall to $40 a barrel by the end of 2006.

Some international experts believe the Western world is in denial about the enormity of the crisis facing us.

Peak Oil says the oil is already running out and a major crisis is looming.

Others agree. In his book Twilight in the Desert, Mr Simmons says Saudi Arabia has dramatically overstated its oil reserves.