Tags: Economist | Baumohl | Oil | crude

Economist Baumohl: Oil May Soar 30%, Hit $130

By    |   Friday, 30 Dec 2011 07:32 AM

Oil prices have risen 9 percent this year to about $99 a barrel, and many experts say the gains will continue next year amid Iran’s threat to cut off Persian Gulf oil exports and turmoil in Iraq.

Iran is threatening to close the Strait of Hormuz in retaliation for the United States tightening its sanctions against the rogue nation.

The White House has promised to prevent such a closure, but if it happened, the world would lose about 20 percent of its oil supply.
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“The possibility that there might be a disruption in oil supply at some time in 2012 as Iran retaliates has, I think, permanently embedded a $10 to $20 premium in the price of oil,” Bernard Baumohl, chief global economist at the Economic Outlook Group, tells The New York Times.

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(Getty Images photo)
“The danger is if oil starts to move toward $130 a barrel, or even higher, depending on whether that confrontation will escalate. Then you’re really talking about the prospect of the U.S. tipping over into recession in addition to Europe, and that the whole global economy will be facing a downturn.”

Some see the move going a lot further than $130.

“Given the oil volume constriction oncoming and the continuing increase in global demand, . . . we will reach $150 or beyond by July 4," Money Morning Global Energy Strategist Kent Moors tells Resource Investor.


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Oil prices have risen 9 percent this year to about $99 a barrel, and many experts say the gains will continue next year amid Iran s threat to cut off Persian Gulf oil exports and turmoil in Iraq. Iran is threatening to close the Strait of Hormuz in retaliation for the...
Economist,Baumohl,Oil,crude
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2011-32-30
Friday, 30 Dec 2011 07:32 AM
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