August 2, 2007 -- Wall Street's smart money is running after oil for its new riches, driving up prices to new records that could push crude past a stunning $100 a barrel in coming months. Energy analysts say many investors - burned by the junk mortgage meltdown - are suddenly bullish about crude oil. Yet they say there are no fundamental reasons for driving up prices, which hit a new intraday high here yesterday of $78.77 a barrel."There's no new bullish news driving this," said energy analyst Peter Beutel of Cameron Hanover.
Beutel expects crude could inch upward this season to a new threshold of $81 a barrel. "Does it make sense? No. "If we see $81, we'll see a lot more speculators coming in, and price [rises] will continue until they hit $95" or higher - "purely on momentum." He added, "We're on the doorstep of where we're headed next."
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Meanwhile, Wall Street speculators have been blamed for adding the last $10 rise in a barrel of crude and are likely to push it higher as drillers confront more difficulties and expenses in locating new oil sources. "There is one clear factor and that is funds that entered the market three weeks ago," said Mark Routt of Energy Security Analysis Inc. "It continues to flow in."
Meanwhile the new weekly government data released yesterday showed a larger than expected drawdown by refineries from crude oil stocks of about 6.5 million barrels. "I think crude still has a bit higher to go. Despite the increase in production, stocks remain comparatively low - refineries have to make up for lost time," said Antoine Halff of FIMAT Research.