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Oil prices could grow to $80-100 per barrel by late August
Oil prices could grow to $80-100 per barrel by late August, expert of the Center of Strategic Developments Vasily Petrov said. However, such price dynamics are logical and are an expected decline before a new upsurge, Nezavisimaya Gazeta, a political daily, reported. The oil industry is experiencing a bear market, as oil prices plunged to their three-month low in secondary trading. Oil prices had reached their first peak in September 2004, after which they declined. A second peak was registered in March. Petrov says that the third peak could come in late summer, as China is expected to sharply increase its demand for electric power and will require a large amount of oil to process into diesel fuel. However, Barrel investment company analyst Alexei Belashov was more moderate in his forecasts. "The demand in China is strong and growing and its economy is developing. However, it is necessary to take into account the fact that the United States is introducing quotas on Chinese products, like textiles. Nevertheless, the United States is trying in every possible way to restrain the upsurge in China's growth," he said. According to Belashov, the Saudi Arabian Energy Minister Ali bin Ibrahim Al-Naimi has said that oil reserves are sufficient and oil-producing nations would be able to meet the demand. "That is why I do not see any strong prerequisites for growth, like in the situation when oil prices leaped to $60 per barrel. At that time, there was uncertainty in the Far East and the dynamics of China's demand was unclear. Besides, the U.S. petroleum stocks had declined significantly. Today they are growing and there are no reasons for any anxiety," Belashov said. The world oil market is now looking for a fair oil price, expected to hover between $45 and $50 per barrel. "The only thing that could prompt rapid growth is the start of a U.S. military campaign against Iran. This event would cause a swift rise in oil prices. However, this is unlikely to happen. The U.S. is bogged down in Iraq
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