Oil May Extend Record Increases on Mideast Unrest, Survey Shows
By Margot Habiby
July 4 (Bloomberg) -- Crude oil may extend record gains next week because of concern a Mideast conflict may curtail supplies and the dollar will weaken, increasing the appeal of commodities as a hedge.
ABC News reported this week that Israel is increasingly likely to attack Iranian nuclear facilities this year. Iran insists its nuclear enrichment work is for peaceful purposes. The dollar has fallen 7 percent this year against the euro.
Fourteen of 26 analysts surveyed by Bloomberg News, or 54 percent, said prices will increase through July 11. Five of the respondents, or 19 percent, said oil will fall and seven forecast little change. Last week, 46 percent said futures would drop.
``Rumors of an Israeli attack on Iran in coming months and a weak dollar are keeping the crude-oil bull alive,'' said Mike Armbruster, co-founder of Altavest Worldwide Trading Inc. in Laguna Hills, California.
The euro fell the most against the dollar in more than two months yesterday after European Central Bank President Jean- Claude Trichet signaled that he may not increase interest rates again after raising the benchmark lending rate to 4.25 percent.
Crude oil for August delivery rose $5.08, or 3.6 percent, to $145.29 a barrel this week on the New York Mercantile Exchange. Futures reached $145.85 a barrel yesterday, the highest since trading began in 1983.
U.S. markets are closed today for the Independence Day holiday.
It was the first bullish forecast in six weeks and only the second time responses haven't been bearish since Jan. 4. The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE NEUTRAL FALL 14****** 7******* 5 To contact the reporter on this story: Margot Habiby in Dallas at firstname.lastname@example.org.