Shortage fears push oil futures near $140

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Shortage fears push oil futures near $140
By Carola Hoyos and Javier Blas in London

Published: May 20 2008 19:06 | Last updated: May 21 2008 10:57

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel, further stoking inflationary pressures in the global economy.

The spot price of Nymex West Texas Intermediate hit a record $130.30 a barrel on Wednesday. On Tuesday investors had rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day.

- May-19Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints.

Neil McMahon, of Sanford Bernstein, said: “Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices.”

PO going mainstream in last few days and growing awareness of PO is of course a wonderfull investment opportunity with Fed helicoptering liquidity, so this is the real beginning of the rough ride. Governement in paralysis because of election time means price curbs and oil cards etc. will be the first job of the next president - with oil at 200 buckaroos or much more.