Oil prices extended gains above $55 today amid a forecast that the market could spike to $105 a barrel and concerns that US gasoline supplies might fall short of peak summer demand.
Energy derivatives trader Goldman Sachs said in a report yesterday the oil markets might have entered the early stages of a "super spike" period, that could drive prices toward $105.
Prices have climbed 28 per cent this year as signs that rapid demand growth in Asia's emerging economies and the US will strain world supply ignited heavy buying from big-money speculative funds.
US light crude rose 38 cents to $55.78 a barrel, moving back toward the record high of $57.60 struck on March 17th.
Goldman Sachs raised its 2005 and 2006 price forecasts for US light crude to $50 and $55, respectively, from $41 and $40, citing resilient oil demand growth. Prices rallied 2.6 per cent on Thursday on the back of the report but also on growing concerns over falling gasoline stocks in the US ahead of the peak summer demand season.
The US Energy Information Administration reported gasoline stocks fell 2.9 million barrels to 214.4 million barrels last week, the fourth decline in a row.
Highlighting anxiety among consuming nations over supply shortages and rocketing prices, the International Energy Agency (IEA) is set to advise importers to adopt emergency oil-saving policies if daily global supplies fall by 1-2 million barrels.
The figure was way below the official trigger of 7 per cent of global supply, equivalent to six million bpd, agreed in the treaty when the IEA - which advises 26 industrialised nations on energy policy - was founded after the oil crisis of the 1970s.