Crude oil prices hit a 29-month high yesterday, closing above $102 a barrel, as the deadly crisis in Libya continues to spur fears that turmoil in the region will spread.
Prices fell slightly this morning following the news that the Arab League is considering an offer by Venezuelan President Hugo Chavez to mediate a peaceful solution. Still, prices haven't dipped below $100 so far today.
Oppenheimer oil and energy analyst Fidal Gheit unequivocally believes that the uprisings, which have also been seen in Egypt, Tunisia and Bahrain, will spread until authoritarian dictatorships are ousted throughout the Middle East. (See: Saudia Arabia's Regime Wll Fall, Says Analyst)
If that does eventually happen, he expects oil to hit $120 to $130 a barrel -- but not $200 or $300, as some have speculated.� Those calls, he says, are "totally exaggerated and totally irresponsible."
Gheit says oil prices are inflated, but there's no need to worry about supply and demand issues.
?We still have plenty of oil, inventories are high and global demand is not recovering as fast as we had expected,? he tells Henry in the accompanying clip. ?OPEC is sitting on 5 million barrels a day of spare production capacity, which can be released in the next few weeks in the event there is disruption in the region.?
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