Traders work in the Crude Oil Futures pit at the New York Mercantile Exchange in New York City July 7, 2006. Oil hit a record high of $75.78 a barrel on Friday, boosted by strong demand in the United States and global tension ranging from Iran's nuclear work to North Korea's missile tests. - REUTERS
LONDON (Reuters):
OIL PRICES will soar to well over US$100 a barrel and stay high as part of a sustained commodities bull run that has another 15 years to run, billionaire United States investor Jim Rogers told Reuters in an interview.
One factor that could bring down the price would be a bird flu epidemic, which would send all asset classes plummeting, he said, although oil would probably fall less than other markets.
"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.
Reiterating earlier comment oil prices would hit at least US$100 a barrel, he said: "It will be much more than US$100 before the bull market is over."
U.S. light sweet crude hit a new record of US$75.40 a barrel on Wednesday and was trading at close to US$75 on Thursday.
Rogers, a former investment partner of billionaire fund manager George Soros, has predicted the commodities bull run has at least 15 years to run.
"It's a major long-term bull market as far as I'm concerned," he said.
Aside from the bullish impact of tensions, described by Rogers as temporary, over Iran's nuclear ambitions and North Korea's missile tests, he said oil was drawing long-term support from the lack of large scale finds
He did not know whether the Peak Oil theory that oil supplies are either at or very near their peak was correct, but said: "If there is oil out there, you had better find it soon."
Apart from new supplies, a factor that could lower prices would be a widespread epidemic of bird flu spread between humans.
"If bird flu should break out, everything will go down and oil would go down to US$40, but I would still urge people to buy oil. It would go down less than other things and it would be the first to go back up," said Rogers.
Rogers has set up the Rogers International Commodity Index for gaining access to the commodity markets.
In the first half of this year, it outperformed its much bigger rivals the Goldman Sachs Commodity Index and the Dow Jones-AIG Commodity Index .
While the RICI gained 9.7 per cent in the first six months of this year, according to Reuters data, the GSCI rose 5.3 per cent and the DJ-AIG gained 3.6 per cent.
Rogers said he could not say exactly how much money was in the RICI, but it was at least $4 billion.
Taken from The Sunday Gleaner, July 9, 2006
