Oil to smash through $125 barrier

Oil will continue its meteoric climb, surpassing the $125 per barrel mark next year, investment analysts predicted at today's DIFC Week conference.

Driven by demand from emerging markets like China and India, crude prices are likely to surge to new record highs and will rest between $125 and $130 per barrel in 2008, argued a panel of investment experts gathered in Dubai to discuss global investing strategies.

"We're looking for oil to rest somewhere between the $125 to $130 mark for next year," said Kamlesh Bhatia, Deputy Chief Executive Officer or Man Investments Middle East.

Panelist Gary R. King added to the consensus that demand from emerging markets would continue to apply upward pressure on the price of crude.

"I can't see in the next 12 plus months and beyond there being a decrease in the demand from those countries," said King, CEO Dubai Mercantile Exchange.

A poll of asset managers and international investors in the audience revealed a similarly bullish outlook.

More than half the audience, 51%, predicted oil would stay above $100 per barrel, while 33% thought it would breach the $150 mark.

"Those are certainly big numbers," said Gary King, speaking of the audience poll numbers. Mr. King, CEO of DME, declined to speculate on an absolute price for the future of the commodity but did add, "I would say we are going to be in a sustained high energy price environment and there will continue to be high volatility."

Oil rose above the $99 per barrel in yesterday's trading before closing at $97.43 per barrel.