Expert predicts $100 a barrel

30 October 2007

The cost of crude oil is likely to break the $100 (£48.50) a barrel mark in the near future, a market expert has predicted.

US crude cost just under $61 a barrel at the start of 2007, but has since climbed to $93, as demand for oil products from the new economic powers of India and China grows.

In addition to demand pressures, the cost of crude oil has been forced up in recent weeks by the tension between Iran and the US, meaning many analysts now expect the price to climb above $100, according to Tim Bray of New Star Asset Management.

He told BBC Radio 4's Today programme: "You've got low inventories ahead of winter, we've got some speculative buying and so it all adds up to upward pressure on the oil prices, and $100 looks pretty likely."

The price of crude oil is the main factor determining the price of heating oil, so if Mr Bray's prediction proves to be correct heating oil users can expect to see their fuel costs rise as winter sets in.