Oil prices rallied to fresh highs this morning, after an analyst at Goldman Sachs warned that prices could rise to $200 a barrel within two years.

Concerns over supply problems in Nigeria, Africa’s largest oil producer, helped to propel US crude futures for June delivery to a high of $122 per barrel, before settling back to 121.65. London Brent crude futures also hit a record of $120.41 per barrel.

Strikes and a campaign of attacks by militants have cut Shell’s production in Nigeria by about 164,000 barrels per day.

A report from Goldman Sachs’ New York-based energy analyst, Arjun Murti, claimed that oil prices could rise to between $150 and $200 per barrel because of shortages in global supply growth and rising demand from developing countries.

“The possibility of $150 to $200 per barrel seems increasingly likely over the next 6 to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,” said the report, dated May 5.

Mr Murti first predicted a super-spike in oil prices to as high as $105 per barrel in 2005.

Members of the Organization of Petroleum Exporting Countries (Opec), which produce 40 per cent of the world’s oil, are unable to lift production significantly while rising domestic consumption in member countries, as well as in China, India and other emerging economies, is compounding the supply shortage elsewhere, the report said.

“The core of our super-spike view has been that a lack of adequate supply growth coupled with price-insulated non-OECD demand growth” is forcing up prices, the report said.

“Non-Opec supply is struggling to grow, with notable declines being seen in Mexico and Russia showing signs of rolling over following an extended period of rapid growth.”

Goldman’s crude oil price forecasts were also revised higher for the period 2008 to 2011. The 2008 estimate for the benchmark West Texas Intermediate contract was lifted to $108 a barrel from $96, the 2009 forecast to $110 from $105, and 2010 to 2011 estimates are at $120 up from $110.

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