Investors were snapping them up because Goldman Sachs predicted that oil prices rise to anywhere from $150 to $200 a barrel. The grim report sent futures past $122, but there were also concerns about declining production in Mexico and Russia, reports John Wilen for the Associated Press.
Goldman Sachs pointed to signs that the world is in the middle of a "super spike" in oil prices, which would culminate in prices eventually rising so high that demand would fall sharply.
Some analysts beg to differ from Goldman’s view. Tim Evans, an analyst at Citigroup, says oil could just as easily drop to $40 a barrel as it could rise because supplies are comfortable.
Hmm…we like what Evans is saying a little better.
Analysts are equally divided on the direction of gas prices. Some say it’s peaked, others say it’s going to follow oil higher.
Have you, by chance, ever wondered exactly how much oil you’re actually getting in those barrels? Today’s your lucky day:
1 barrel = 159 liters or 42 gallons
Crude oil is measured in barrels because, to put it simply, that’s the way it’s always been done. According to OPEC, when oil first came into large-scale commercial use in the United States in the 19th century, it was stored in wooden barrels. Reserves are estimated at more than 1 trillion barrels. In 2006, the total world oil output was 72 million barrels per day.
Capture exposure to the rising futures of oil and gas with these ETFs:
- United States Oil (USO), up 27.7% year-to-date
- United States 12-Month Oil (USL), up 27.6% year-to-date
- United States Gasoline (UGA), up 13.5% since Feb. 28 inception
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.