'Crude Oil would trade $187 a barrel in 3 years'

MUMBAI: Crude Oil prices have been going up and up all these months. Do you remember that six years back in 2002, the oil price was $20 a barrel? Now that oil price has gone past $100, how far can it go?

According to Keith Fitz-Gerald, Investment Director of Money Morning/The Money Map Report, crude oil would trade as high as $187 a barrel in the next three years.

Back in early 2002, when oil was trading at less than $20 a barrel, Fitz-Gerald had predicted that oil prices would reach $100 a barrel within 10 years.

Now again, the seasoned analyst writes:

"Late last year, when oil was trading in the range of $90 a barrel, I first publicly predicted that crude would trade as high as $187 a barrel in the next three years . In the middle of March, just days after I reiterated that prediction and provided some potential related investment opportunities in an edition of Money Morning , Wall Street giant Goldman Sachs Group Inc. ( GS ) issued a report predicting crude oil prices would reach $175 in the next few years.

Real pricing changes and the altered behavior that flows out of such stressful stretches can only take place when prices are high and when shortages become apparent. Without the benefit of all the information uncovered by such a volatile environment, forecasting can be a fool's game.

As I've demonstrated, whenever I've made price projections, I've always made sure to factor in as many variables as possible. But it's clear to me that the Energy Department did not do the same.

Therefore, as much as we'd love to believe that gasoline prices will stop their incredible ascent at $3.60 a gallon this spring, we can't. Not only does the government's price point seem to be little more than another guess in a long line of baseless predictions, it's even contradicted by the saga that's unfolding on the global economic stage.

Absent the introduction of proven alternatives to gasoline, we're entering an era in which a pump price of $3.60 a gallon is going to be looked back on as a bargain.

And while it's going to be a painful period, investors who view this as an opportunity may well find ways to take the sting out of escalating energy prices."