Oil Sets New Record Near $121, Headed to $150-$200. Get Ready For $5 Gas

Oil soars to a new record high today near $121 on supply disruptions in Nigeria, tensions with Iran over its nuclear program, a still weakening greenback and signs of stronger US demand.

Goldman analyst Arjun N. Murti says the problem will continue to get worse: He predicts overall supply growth will fail to keep pace with demand even over the next 1-2 years. This disconnect may cause crude oil prices to rise to $150-$200:

The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty.

A CNN/Opinion Research Corp. poll found that 78% of people said they figure gas will rise to $5 a gallon. Last year, in the same poll, only 28% were expecting $5 gas.

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