Gazprom Warns Oil could Hit $250

Terry Macalister, June 10 2008

The Russians undermined Opec's attempts to talk down the oil market today by warning that crude prices could almost double to $250 per barrel within 18 months. The prediction from Alexei Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 per barrel even though Opec insisted everyone was already "panicking" unnecessarily and stressed there were no physical energy shortages.

The soaring value of crude today pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills while the current price of motor diesel has already reached £1.30 per litre in some parts of the country.

Gazprom said the higher crude prices it expected would drag gas values up too. "We think it (oil) will reach $250 a barrel in the foreseeable future," said Miller insisting that high demand rather than financial speculation was the primary factor for high hydrocarbon prices, an argument that runs counter to that put forward by Opec. ...

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