Russia Pumps It Up

Move over T. Boone Pickens and Goldman Sachs, there's a new ultra-bull in oil town. The target? Crude at $250 a barrel.

That forecast came not from an oil executive or an analyst, but the chief executive of the Russian natural-gas behemoth Gazprom.

Responding to a question about oil prices at a news conference today in Deauville, France, Alexei Miller of Gazprom said, "We think it will reach $250 a barrel in the foreseeable future."

That is significantly higher than oil's current price of around $135 a barrel, up about $1 in part on the International Energy Agency's lowered forecast for production from non-OPEC producers.

And it is higher than analysts' forecasts of $150-a-barrel oil and higher than the $200 super-spike call of Arjun Murti, an analyst with Goldman Sachs.

Murti, you may recall, received much attention in March 2005, when said that the oil market had entered the early stages of a multiyear super-spike period during which prices could climb as high $105 a barrel. His forecast came true earlier this year. Last month, he suggested that oil could rise as high as $200 in the next six to 24 months if there was a serious disruption.

Gazprom, the world's largest natural-gas company and Russia's most powerful corporation, exports gas to Europe at prices linked to oil products, Reuters notes. Oil at $250 a barrel would mean natural gas at $1,500 per 1,000 cubic meters.

"It's crazy," one analyst told Reuters "Maybe they know something we don't."

Maybe. Gazprom is very tight with the Kremlin, of course. Indeed, its former chairman, Dmitri Medvedev, is president of Russia.

Jeffrey Cane

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