The two things that have always been key circuit-breakers of high oil prices have been a) demand destruction – essentially, when pain at the pump forces consumers reduce their fuel consumption, cooling off prices – and b) a global increase in supply, driven by producers looking to exploit lofty prices that ease as they flood the market with more oil. Guess what? For the first time ever, neither seems to be happening. Which is exactly why oil popped above $120 a barrel yesterday, occasioning the resurfacing of the dire prognostications of one Mr. Arjun N. Murti. Here, his predictions for the turbulent months to come.

Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.

New York-based Murti first wrote of a ``super spike'' in oil prices in March 2005, when he said oil prices could range between $50 and $105 a barrel through 2009. The price of crude traded in New York averaged $56.71 in 2005, $66.23 in 2006 and $72.36 in 2007. Crude oil futures in New York rose to an intra- day record $120.54 a barrel today.

``The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,'' the Goldman analysts wrote in the report dated May 5.

Soaring energy costs have so far failed to stem rising consumption in developing nations, with demand led by China, India and the Middle East. China, the world's fastest growing major economy, has more than doubled oil use since New York crude oil dropped to this decade's low of $16.70 a barrel on Nov. 19, 2001.

Price forecasts for spot U.S. benchmark West Texas Intermediate crude oil for 2008 to 2011 were revised higher by Goldman. The 2008 price estimate was raised to $108 a barrel from $96, the 2009 forecast to $110 from $105, and 2010 to 2011 estimates are projected at $120 from $110, the analysts said.

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