RIGA - The European commissioner for energy, Andris Piebalgs, has suggested that oil at $200 per barrel was a distinct possibility if current trends continue.
"When I became commissioner in 2004, a barrel of oil cost $52. The price has doubled in three years, and we can't exclude that by 2011 oil will cost $200 per barrel," Piebalgs told the Spanish paper El Economista, the Delfi portal reported.
"What I'm saying is only partially an exaggeration," he added, "so it shouldn't surprise us."
Oil futures reached a record high of $103.76 on March 3 as investors tuck their dollars in commodities as a hedge against the falling dollar, which simultaneously hit a record low against the euro.
Analysts say the price is unjustifiably high since oil has delinked from the laws of supply and demand and is now climbing as a short-term hedge/speculation. Reports indicate that the price could continue to tick upward, though some analysts have warned of an asset bubble that could suddenly pop.
"We can't exclude $200 per barrel oil since over the past two years we were all mistaken since we [previously] considered what has happened was impossible," Piebalgs told the Spanish paper.
