Tags: Oil | Price | Threat | Recovery

Survey: Oil Price to Keep Surging in Threat to Recovery

Monday, 27 February 2012 07:31 AM

Oil prices will continue climbing this week, a CNBC survey finds, with some participants expecting oil to eventually rise so high that the fragile U.S. recovery will come under pressure.

A CNBC poll of analysts and traders showed 12 out of 16 respondents, or 75 percent, expect oil prices to rise this week, the news channel reports.

Tensions between the West and Iran over the latter's nuclear ambitions have come to a boiling point recently.

Editor's Note:Wall Street Whistleblower Warns of Meltdown, See His Uncensored Interview

Iran has threatened to close the Strait of Hormuz, which connects oil-rich Persian Gulf countries with the rest of the world, and has even cut off supply to France and the U.K. to protest economic sanctions slapped on the country for its nuclear program.

Brent oil, the European crude, has surged more than its U.S. counterpart, West Texas Intermediate (WTI), although some experts expect U.S. crude to catch up.

"WTI is about to see a rally at the expense of Brent as facts like France getting just 3 percent of oil from Iran and Britain not taking Iranian oil deliveries in 6 months cause a contract allocation shift into WTI," says John Licata, CEO and Chief Commodity Strategist at Blue Phoenix.

Some say gasoline will dampen economic recovery, as for every penny a gasoline rises, U.S. annual spending falls by $1.4 billion, says David Kotok, chairman and chief investment officer, of Cumberland Advisors.

"A big uncertainty premium is building" in the price of crude oil because of the geo-political uncertainty, Kotok writes in a weekly commentary, CNBC adds.

"We remain overweight energy."

The average U.S. price of gasoline jumped 18 cents a gallon to $3.69 in the past two weeks, according to the nationwide Lundberg Survey, Reuters reports.

The national average cost for a gallon of regular gasoline rose to $3.69 on February 24.

"If these (Mideast) fears become more fervent, on either a real or a perceived basis, then crude oil prices could jump again," and prod gasoline prices higher, survey editor Trilby Lundberg tells Reuters.

Editor's Note:Wall Street Whistleblower Warns of Meltdown, See His Uncensored Interview

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Monday, 27 February 2012 07:31 AM
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