07/24/06 Analyst expects $100 oil

Farm and Ranch July 24, 2006 World wide demand for oil and fear over continuation of production, real or imagined, are the driving forces behind recent new record highs in crude oil prices. And John Kilduff, Senior Vice President and Co-Head of the Energy Risk Management Group for Fimat USA, believes crude has to go higher still. Kilduff: "I think this crude oil price has to go up and touch the $100 level to wring out some of the speculation that has come into this market. So I think we will see that $100 mark probably within the next three or four months, before possibly the economic damage will be done, the monetary tightening policies of the world's central bankers can rein in some of this economic growth both here and abroad, and we may be able to see finally a pull back in crude oil prices as we enter 2007." Kilduff, who was speaking at a Chicago Board of Trade Mid-Year Outook event last week, said if some of the fast growing economies can slow down and some geo-political tensions can calm, and the inventories stay as robust as they are, crude could fall into the 50-55 dollar range into 2007. Kilduff: "But I have to say the base price of crude oil if you were to take everything out, all the geo-political worries and some of the other factors, you'd probably be looking at a base crude oil price now of no lower than $45." Kilduff says crude oil has become a flight to security for some investors now just as bonds have represented a flight to quality. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.