Posted on 09/05/2005 7:39:23 AM PDT by cloud8
PUBLISHING billionaire Steve Forbes has predicted that soaring oil prices will lead to a crash that could make the hi-tech bust of 2000 "look like a picnic".
Mr Forbes, publisher of Forbes magazine, said the price of oil, which peaked at more than $US70 a barrel on Monday as Hurricane Katrina headed for the US Gulf Coast, was unsustainable.
He said factors such as inflation and increased demand for oil from China and India accounted for only a small part of the price hike from $US25-30 a barrel three years ago.
"The rest of it is sheer bubble speculation," he said.
Mr Forbes, who was speaking at the opening of the Forbes Global CEO Conference in Sydney yesterday, said the higher the oil price rose, the harder it would eventually crash, creating more pain for hedge fund managers and their clients.
"I don't think it's going to go to $US100 but if it does the crash is going to be even more spectacular," he said.
"It will make the hi-tech bubble look like a picnic -- this thing is not going to last."
He predicted that oil would fall to $US30-35 a barrel within a year.
Mr Forbes's comments came as the price of oil eased following US Government comments that it could release some of its Strategic Petroleum Reserve.
The 700 million barrel stockpile is set aside for emergency use and could be used to counter oil shortages caused by Katrina's impact on the Gulf of Mexico, which accounts for about a quarter of US output.
After leaping nearly $US5 a barrel to $US70.70 on Monday, US oil futures retreated more than $US1 a barrel yesterday.
I would wager that we don’t see $100 barrel oil again and we will have $300 oil. Anyone that has a few million barrels is sure free to sell it for $30 if he chooses.
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