$72 oil? Expect $105 spike

WorldNetDaily.com author and columnist Craig R. Smith told CNBC "Closing Bell" host Maria Bartiromo today that oil prices could spike over $105 a barrel given the explosive Iran situation and supply demand fundamentals.

Charles Maxwell, an oil analyst who was also a guest with Smith, said, "These terrible things like Iran, Nigeria, Venezuela are now happening on the geopolitical front with such frequency that they are becoming a permanent condition. We are caught in an energy crisis which may be 50 percent fear, but real nonetheless."

Said Smith: "I don't think people are taking into consideration the threat from Iran, not just from nuclear, but also and the effect they have as second-largest OPEC producer and fourth-largest producer in the world. If you take that out of the equation, I think estimates by Merrill Lynch and others of a spike price of $105 are a legitimate target."

When asked when higher oil prices affect consumer spending, Smith reminded Bartiromo, "It's not just the price at the pump that is affected by rising oil; major corporations like UPS, Fed Ex trucks garbage trucks, etc., must eventually pass on the price of rising fuel.

"For example, according to Merrill Lynch, each 1-cent rise in gas prices sucks $1.3 billion a year from U.S. consumer spending. That's $130 billion gone from American wallets over the last year."

Added Smith: "We must move toward energy independence as a top priority, as we cover in the book, 'Black Gold Stranglehold.'"

In an exclusive pre-show interview, Smith told WND: "The Middle East is a powder keg with a lit fuse that could blow any day. Oil at $71 should be no surprise to WND readers. Last fall, several major investment firms like Goldman Sachs projected an oil spike price of $105 per barrel."

Continued Smith: "Expectations of a further decline in gasoline inventories are also fueling the market jitters, especially with tight supplies ahead of the summer driving season. Gas prices have already spiked above $3 a gallon here in Phoenix.

"Crude oil, gasoline and heating-oil surged to record highs in 2005 on signs that U.S. refineries lack capacity to make enough fuel. Gasoline inventories have declined for the past seven weeks, while refineries run at 86.2 percent of capacity," commented Smith.

"Unless we break the "Black Gold Stranglehold" of the Mideast oil dependence, prices could double again as growing global demand continues to outstrip our supplies of refined oil and gas."

In Smith's latest report, "$5 Gas Coming Soon?" he warns, "Another 1970s-style oil crisis would create economic and political discontinuity of historic proportions, as the world tries to adjust to a new energy environment and it's economic impact."

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