New fear for oil:
$100 by winter
Analyst warns of worst-ever crisis, surging demand to keep prices high
The surging price of oil has world leaders fretting as analysts predict another gush in prices in the coming months, with some estimates between $80 and $100 per barrel.
"We could be at $100 by this winter," Texas oil analyst Matt Simmons told Britain's Observer. "We have the biggest risk we have ever had of demand exceeding supply. We are now just about to face up to the biggest crisis we have ever had."
Simmons' new book "Twilight in the Desert" debuts this week, and in it he warns the skyrocketing price could plunge the world into war.
Prices of crude jumped to $60 levels last week, but fell back, raising hopes of easing back to more moderate levels.
This morning, crude futures hovered at $58-$59, due to fears of short supply of heating oil not meeting winter demand.
Tensions between the U.S. and Iran over Tehran's nuclear program also are causing worry about disruptions on the supply of oil from the Middle East.
The volatility is pushing a plan to control soaring oil prices to the top of the G8 summit agenda in Scotland.
"In the discussions on the global economy, I think there are bound to be discussions about oil, because oil prices and oil-price rises is clearly of fundamental importance to all the G8," Michael Jay, head of the UK diplomatic service told reporters.
"There are discussions going on too at the moment on the global economy and oil, it is something which is of huge importance to a number of G8 leaders, something that is very much on [German] Chancellor Schroeder's mind. I cannot tell you whether there will be specific agreements, but that is certainly going to be I think a major topic for discussion on Thursday morning."
While some analysts expect higher output of fuel in the coming year with prices boosting investment by energy firms, Simmons is warning of a shortage of drilling rigs due to years of underinvestment.
"Many of these projects are aspirations," he told the Observer. "Many of them won't create peak production in the first year, and many of them within five years will be in decline."
Not all forecasts are so gloomy. The Economist Intelligence Unit is predicting prices will peak by year's end, and drop 10 percent next year as demand is reduced by an expected slowdown in China's economy.