Shaun Polczer / Calgary Herald | June 11, 2008

Oil could hit $200 US by the end of this year, soar to $250 or burst like a speculative bubble.

And as delegates to the Global Petroleum Show discovered Tuesday, the so-called “experts” are anything but united on what lies ahead when it comes to oil prices.

Gerry Protti, EnCana Corp.’s vice-president of government and public relations, told a panel discussion it’s possible that oil prices could indeed cross the key $200 level.

“I guess it’s possible because a year ago we would have said it’s unlikely to be $135 a barrel. Who knows?”

However, Mohamed Al Hamli, energy minister for the United Arab Emirates, warned that $200 oil would seriously damage the world economy.

“I think $200 is too much, especially for the emerging markets to handle,” he said.

When pressed on how high oil prices could go, he replied: “Around the current levels is probably a reasonable guess.”

Oil lost $3.04 in New York on Tuesday, to close at $131.31. It set a record of $139.12 last Friday while making the largest single-day price jump in history.

Gasoline prices in Calgary, tracking soaring oil prices, hit another record Tuesday, averaging $1.305 per litre, according to MJ Ervin and Associates.

The global oil bulls are calling for further price increases. Alexi Miller, CEO of Russian natural gas giant Gazprom, said he expects oil to hit $250 in the “foreseeable future” as competition for energy resources like oil increases.

In April, CIBC economist Jeff Rubin predicted that oil would average $225 by 2012.

Despite the frenzy over windfall oil prices, Alberta Premier Ed Stelmach said the government continues to base its economic forecasts on $69 a barrel. “Obviously, it is much above that,” he told the panel. However, Stelmach noted some economists think oil prices could fall, not keep rising.

“That’s one of the reasons why the province of Alberta has one of the most volatile revenue streams of any jurisdiction in North America, making for very difficult financial planning. That’s why we always take a very conservative look at what the pricing is.”

The premier is not alone in his pessimism.

Sean Cota, a co-chairman of the Petroleum Marketers Association of America, warned the CFTC Tuesday that today’s oil prices are a speculative bubble about to burst and cause havoc for those who actually take physical delivery of oil.

“This bubble, when it bursts it will be in a very disorderly way,” he said. “There is a large group (of speculators) that is dominating the industry to the point where the physical markets are immaterial.”

Outside of OPEC and the former Soviet Union, Canada is seen as one of the few countries capable of increasing oil supplies, mainly from the oilsands north of Fort McMurray.

About 1.5 million barrels a day is produced from extra heavy reserves such as bitumen, a number that is expected to double over the next decade.

The International Energy Agency on Tuesday reported that Russia is officially the world’s largest oil producer at 9.5 million barrels per day, followed by Saudi Arabia at 9.2 million. By contrast, Canada came in ninth place 2.5 million barrels a day.

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