Oil May Break $100 Barrier This Week

Some see 'violent correction' once $101.70 is shattered
By Peter Fearon,  Newser Staff
Posted Nov 5, 2007 3:37 AM CST
High gas prices are posted at a Chevron gas station in Redwood City, Calif., Friday, Nov. 2, 2007. Chevron Corp.'s third-quarter profit plunged even further than analysts feared, driven by the second...   (Associated Press)
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(Newser) – With oil prices poised to break $100 a barrel this week, potentially punching through the inflation-adjusted record of $101.70 in 1980, speculation shifts to how long it will stay there. The steep rise—27% in 3 months—could set the stage for a dramatic fall. "We probably are headed to a hundred bucks, but I would expect a violent correction very soon,"  one broker tells the Wall Street Journal.

Supply shortfalls, undiminished demand, speculation by investors, and the looming Turkish military action against Iraq have fueled the increase, and those trends aren't likely to reverse. But investors with long bets on $100 a barrel could trigger a price plunge when they "decide at once that the market has gone as far as it can," warned an energy analyst.