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US$200 a barrel tipped by energy commissioner :
Article from: Agence France - March 04, 2008 11:38am

OIL prices could reach US$200 a barrel, the European Union's energy commissioner said in an interview published in Spain.

His prediction came before an OPEC meeting to decide daily output levels.

"When I arrived at the European Commission in 2004, a barrel of oil cost $52. It has doubled in three years. We can't rule out that in 2011 it will be at $200," Energy Commissioner Andris Piebalgs from Latvia, told business daily El Economista.

"What I am saying is, in part, a joke, but it shouldn't surprise us," he said, adding that when US investment bank Goldman Sachs predicted oil could reach $100 three years ago, "everyone took it as a joke".

"We can't rule out $200 because in the last two years, all of us have been completely mistaken, thinking that what is in fact happening now was impossible," Piebalgs said.

Oil prices struck a record-high 100 dollars at the start of January and on Friday the price of New York crude hit a fresh peak of 103.05 dollars per barrel.

The 13 members of the Organisation of Petroleum Exporting Countries, who together pump 40 per cent of the world's oil, are due to meet in Vienna, Austria, to decide on their daily output levels, currently set at 29.67 million barrels.

In a statement made ahead of the meeting, OPEC President Chakib Khelil, who is also Algeria's energy minister, said the body will either hold output steady of cut production "to restore market balance and stability".

Piebalgs told the newspaper he "couldn't imagine (an OPEC production) cut".

"I hope OPEC shows us that we are not running out of oil and that, in the medium- and long-term, it is capable of increasing production. Markets are very nervous," he said.

"Prices are going crazy because there needs to be long-term guarantees that OPEC has enough resources to respond to the increase in global demand. It's not enough for OPEC members to announce on Wednesday a production increase of 500,000 barrels," he added.