By Tom Incantalupo
01 April, 2005
gasoline and heating oil are expensive now? Get this: Analysts at Goldman
Sachs said yesterday that there was a good chance crude oil would nearly
double in price in the next two years, topping $100 a barrel.
in oil demand and economic growth, especially in the United States and
China ... has surprised us," the six Goldman analysts wrote in
a research report. What they called a "super spike" period
is beginning, they said, which could drive oil prices toward $105 a
barrel in 2007.
The ominous prediction
could prove conservative, the analysts said, if there are major supply
disruptions in producing areas. But the analysts also predicted that
prices so high would reduce demand for petroleum so that prices would
sharply rising oil prices could depress world economies, wreck fuel-dependent
industries such as airlines, and result in much higher prices for natural
gas and electricity. Predictably, the Goldman report sent crude oil
futures higher yesterday; the most closely watched grade for May delivery
closed at $55.40 a barrel on the New York Mercantile Exchange, up $1.41.
But some analysts
were skeptical that prices would rise near $100 in the foreseeable future.
Mark Routt, of Energy Security Analysis Inc., a consulting firm in Wakefield,
Mass., said governments, including that of the United States, would
likely tap strategic petroleum reserves to stem the rising prices.
has barely sprung, gasoline prices locally already are within seven
cents of the records set last June. Experts are predicting further increases
as summer approaches and driving increases.
gasoline averaged $2.178 a gallon on Long Island yesterday, according
to the AAA's daily survey of stations - a half higher than the day before
and 16.5 cents above a month earlier. The Nassau-Suffolk average hit
a record $2.248 on June 8.
In the city, regular
unleaded averaged $2.225, also up half a cent from a day earlier and
16.7 cents higher than a month earlier. The city's record average of
$2.282 also was set June 8.
average is a record $2.159, according to the AAA. Prices have yet to
reach their inflation-adjusted record high of more than $3.08 set in
March of 1981.
Home heating oil
also is near a record, although the Long Island average dropped a penny
last week, to $2.364, according to a weekly survey by the state Energy
Research and Development Authority. In the city, the average rose slightly
from a week earlier to a new record of $2.377.
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