Oil prices soar. But why?

Kevin G. Hall | McClatchy Newspapers

last updated: October 18, 2007 06:41:43 PM

WASHINGTON — When investment bank Goldman Sachs & Co. said in March 2005 that oil prices could surpass $100 a barrel, it was accused of fear-mongering. Oil prices, after all, were around $57 a barrel.

This week, competitor Barclays Capital led a research report with this statement: "The issue seems no longer to be whether oil will reach $100 a barrel, but when." That statement barely raised an eyebrow.

Prices for contracts of future delivery of oil, called futures, closed up $2.07 on Thursday to $89.47 on the New York Mercantile Exchange. In after-hours electronic trading, prices hit $90.02. Prices are up almost $39 from a Jan. 18 low of $50.48 a barrel.