Oil scenario to $100 a barrel ?

The United States Oil Fund (NYSE: USO) has been moved up by 1.8% this year, following a fall of 54.8% in 2008. Even with the recovery we have seen crude oil prices since February, oil is only about $ 60 per barrel today - or about 60% below its record set last summer.

It could be some time before you see $ 100 barrels of oil, although it may be closer than one might expect. In a new report published by the International Energy Agency, the organization warned of the possibility of very high oil prices over the next three years the world economy should regain its footing. The idea is that the hike in oil prices would result in demand caused by the postponement of the oil companies huge amounts of investment in future oil supplies, while the recession continues.

Surprisingly, the USO has raised to 48.2% since bottoming in mid-February. Whether or not the recent momentum is sustainable in the short term is another matter entirely. Earlier this month the Department of Energy reported that crude inventories had reached its highest level in 18 years. It has also been reported that OPEC is unlikely to slow its production anytime soon. Taken together, these factors present a strong argument that the recent rise in oil prices is driven more by speculation and not by the underlying fundamentals. [Source]