Oil has been steadily on the rise since the beginning of 2009. But could it reach mid-2008 levels or climb higher still?
Jim Rogers, an American investor who co-founded the Quantum Fund with George Soros, told the BBC’s Justin Rowlatt on Wednesday the prices are certain to exceed those levels.
“Well, the surprise is going to be how high the price of oil stays and how high it goes, because Justin [Rowlatt] we have had no major elephant [field] oil discoveries in over 40 years,” Rogers said. “The International Energy Agency is going around the world pleading with people to listen. Known reserves of oil are declining. It is not good news. Unless somebody discovers a lot of oil very quickly, prices are going to go much higher over the next decade.”
How high will it go? Oil is currently trading at about $90 a barrel, and according to Rogers the price could double and then some.
“Justin, the price of oil is going to make new highs,” Rogers said. “It will go over $150 a barrel. It will probably go over $200 a barrel.”
Rogers warned the world is running out of reserves, which makes things problematic. And even if you take into consideration the recently discovered reserves, getting to them and them being sufficient to meet demand still aren’t a cure-all.
“Justin, those reserves off the coast of Brazil are wonderful if you own them, but even the wildest and most optimistic estimates would only add one year’s reserves to the world,” he said. “The world is using 86 million barrels of oil every day, Justin. Even if it stays static or goes down a little bit, those finds off Brazil will make somebody rich, but they are not going to solve the world’s problems. And, if you know of a lot of oil in the Arctic, please tell us where it is, but it is going to be very difficult to get it out of there.”