Money Morning Boosts Oil Target to $225
Source: Money Morning (5/8/08)
Investment Director Keith Fitz-Gerald, one of the first global financial gurus to predict triple-digit oil prices, has boosted his target price for crude oil from $187 to $225.
The case for the target-price increase of 20% was very clear.
"The math is really simple here," Fitz-Gerald said in an e-mail interview from China, where he was heading an investment-research tour. "We are burning through supplies at a rate that’s four times to five times faster than we’re discovering new reserves. Throw in a few [surprises] … perhaps a terrorist event …and add in the accelerating use of oil and gasoline in Third World countries, and we have the recipe for far higher prices. That’s already in the oven."
Crude-oil futures jumped up over the $123 a barrel level yesterday (Wednesday) - closing at an all time record - as worries about worldwide oil supplies continued to sweep away any good news in the energy sector. In fact, prices have soared more than $11 a barrel - or 9.8 % - over the past four days alone, reaching back to last Thursday, MarketWatch.com reported.
But it wasn’t the price increases that prompted Fitz-Gerald to boost his oil-price target. In fact, he did that last week. In addition to the proprietary strategy he uses to project market prices, Fitz-Gerald said he relied on some of the observations he’s been making as part of the investor trip he’s leading through China.