$200 per barrel oil a possibility?
NEW YORK -- As crude oil continues to set record prices on a seemingly daily basis, one international investment bank says $200 per barrel oil could be a reality in the future. U.S.-based investment bank Goldman Sachs says the price of oil could reach US$200 within the next two years. On Tuesday the price of oil reached a record high of US$122.73 a barrel before settling at US$121.84 at day’s end. "The possibility of $150 to $200 per barrel seems increasingly likely over the next six to 24 months, though predicting the ultimate peak in oil prices . . . remains a major uncertainty," says a research note from Goldman Sachs. Goldman Sachs is not alone in its forecast. While many experts agree the price of oil will continue to skyrocket and reach prices between US$150 and US$225, settling on a ceiling for the price of oil is harder to agree on. Regardless of the actual price oil tops out at, economists do agree the economy will suffer as the price continues to rise. Doug Porter, deputy chief economist for BMO Capital Markets, was recently reported as saying $200 oil would probably cause a global economic slowdown that would push the weak U.S. economy into a deep recession and sideswipe Canada as well. As the price of oil continues to rise, so does the price of all consumer goods in the country. Most directly, fuel prices are reaching almost unmanageable heights (diesel reaching $1.50 per liter in remote parts of Canada), but soon food and other consumer goods will have noticeable increases. Another U.S.-based research firm, Cambridge Energy Research Associates, recently released an updated “Break Point scenario,” which put the price at US$150. -- with files from the Calgary Herald