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Oil Prices Will Reach $225

Posted May 8, 2008

“The math is really simple here. We are burning through supplies at a rate that’s four times to five times faster than we’re discovering new reserves. Throw in a few [surprises]… perhaps a terrorist event… and add in the accelerating use of oil and gasoline in Third World countries, and we have the recipe for far higher prices. That’s already in the oven.” — Keith Fitz-Gerald, Money Morning

by William Patalon

Baltimore – (TFN): Money Morning Investment Director Keith Fitz-Gerald - one of the first global financial gurus to predict triple-digit oil prices - has boosted his target price for crude oil from $187 to $225.

The case for the target-price increase of 20% was very clear.

“The math is really simple here,” Fitz-Gerald said in an email interview from China, where he was heading an investment research tour. “We are burning through supplies at a rate that’s four times to five times faster than we’re discovering new reserves. Throw in a few [surprises]… perhaps a terrorist event… and add in the accelerating use of oil and gasoline in Third World countries, and we have the recipe for far higher prices. That’s already in the oven.”

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Crude-oil futures jumped up over the $123 per barrel level yesterday (Wednesday) - closing at an all time record - as worries about worldwide oil supplies continued to sweep away any good news in the energy sector. In fact, prices have soared more than $11 a barrel - or 9.8 % - over the past four days alone, reaching back to last Thursday, MarketWatch.com reported.

But it wasn’t the price increases that prompted Fitz-Gerald to boost his oil-price target. Read on to learn more.

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Posted by William Patalon · Filed Under Oil and Energy 

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