Crude Futures Rise to New High Above USD57

Goldman Sachs report causes Crude Futures Rise to New High Above [US]$57 by predicting that a "super-spike" of USD105 may be reached soon. Although,

Oil prices are now 67 percent higher than a year ago, but still well below the inflation-adjusted high above $90 a barrel set in 1980.

There are dissenters to this view because it creates an ...unreasonable fear in the market:

Oil analyst Marshall Steeves of Refco Group Inc. in New York said the rally in fuel prices is "overdone."

"I don't think the sky's the limit," Steeves said. "At some point, there'll be some impact on demand. But where that price is, is hard to determine."

In other words, no one has any idea what is going on. But you should not panic even though they are acting like headless chooks.

The reasons for the report were:

... The report said that oil prices could go as high as $105 a barrel _ the price Goldman Sachs said may be necessary to significantly curb energy consumption.

Goldman Sachs analyst Arjun Murti said factors contributing to the run-up in prices include geopolitical turmoil in oil-producing countries.

"Oil markets may have entered the early stages of what we have referred to as a 'super spike' period _ a multiyear trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return," the report said.

The political instability referred to but not mentioned is:

• Illegal occupation of Iraq
• Pending war in Iran
• Socialist revolution in Venezuela
• Impending death of King Fahd in Saudi Arabia possibly unleashing a civil war between claimants to the throne
• Ongoing civil war in Colombia
• The Yukos crisis in the Russian Federation

As the US imperialists struggle to maintain control over the world's capitalist economy, their efforts are adding to the instability of the markets. For them not to try means that a sooner demise of the US hegemony. We are living in the dangerous times of a collapsing power.