Oil Prices May Surge to $200 on Mideast, Japan, Kudrin Says
March 16 (Bloomberg) -- Oil prices may surge to between $150 and $200 a barrel because of political turmoil in the Middle East and the crisis in Japan, Russian Finance Minister Alexei Kudrin said.
"The growth will be speculative and short-lived," Kudrin said at a conference in Moscow today. The market may see continued volatility or price increases as a result of the disaster at a nuclear power plant in Japan, he said.
Oil rose from a two-week low as escalating violence in Bahrain stoked concern turmoil may spill into neighboring Saudi Arabia, threatening supplies from the world's biggest crude exporter. Crude for April delivery rose as much as $1.49 to $98.67 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.55 at 1:02 p.m. Moscow time. Yesterday, prices fell to $97.18, the lowest settlement since Feb. 28.
Economic damage from Japan's earthquake, which has left more than 11,000 people dead or missing, will be less severe than the global financial crisis in 2008, according to Kudrin. Russia isn't planning to cut its holdings of Japanese assets because their quality "isn't in doubt," he said.
"We are absolutely sure of the resiliency of the Japanese economy, its flexibility and ability to cope with these difficulties," he said. Concerns about the size of Japan's debt won't limit investments in the country's government notes.
The area affected in Japan accounts for 6 percent to 7 percent of the country's gross domestic product and will "weaken the rate of growth in Japan itself," Kudrin said.
The global economy will face a shortage of natural gas in the next few months because of growing demand in Japan, keeping prices for the fuel at a high level, according to Kudrin.
Article first appeared at: http://www.bloomberg.com/news/2011-03-16/oil-prices-may-surge-to-200-on-mideast-japan-kudrin-says-1-.html
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