Bloomberg – Jim Rogers, the co-founder of George Soros’s Quantum hedge fund, says oil prices will reach $100 a barrel, possibly this year. Merrill Lynch & Co.’s Francisco Blanch says no way.
“Unless somebody discovers something very quickly and very accessibly, we’re all going to be dumbfounded at how high the price of oil will go, including me,” Rogers said in an interview in Singapore.
Fighting in Lebanon between Israel and Hezbollah forces, backed by Syria and Iran, helped send New York crude oil for August delivery to a record $78.40 on July 14 on concern the violence may spread through the Middle East, the region that produces more than 30 percent of the world’s crude.
Not to worry, says Blanch, the head of commodities research at Merrill, the world’s biggest brokerage. Oil supplies would have to stop from a country such as Iran, the second-largest Middle East oil producer, to drive the market higher, he said.
“It’s unlikely we will see another price rally from here, unless the current conflict expands beyond its current borders,” Blanch said in a July 17 interview in London. “You’d need physical disruptions, and large ones, to bring the price to $100. You’d probably need to lose Iran.”
A growing number of Wall Street traders are siding with Rogers. Bets on futures contracts for $100 oil tripled in the past three months, helped by demand for fuel from China, the world’s fastest-growing major economy.
