Oil

http://online.wsj.com/public/article_print/SB120700920323078811.html By Guy Chazan

Where do you think oil prices will be next year? Go ahead, pick a number—any number—and you can probably find an expert somewhere who agrees with you. Andy Xie, the chief Asian economist for Morgan Stanley, says oil prices are about to collapse—recent prices of about $60 a barrel are far too high to last. The oil analyst Matthew Simmons says hogwash—we'll soon be paying $100 a barrel. Other pundits have staked out much of the wide real estate between those predictions.

Oil prices hit 21-year highs on Wednesday as fears grew about interruptions to world oil supply.......

Crude oil futures on the New York Mercantile Exchange on WEednesday surged $1.21 to $43.05 a barrel, breaking the 21-year-old exchange's $42.45 record set in June.....

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Commodity prices were steadier on Thursday after the International Monetary Fund raised its 2007 forecast for global economic growth to 4.9 per cent from 4.7 per cent previously. The IMF also provided an upbeat assessment for the outlook for non-energy commodity prices in its twice yearly update on the global economy.

The IMF is forecasting 10 per cent growth in China this year with its rapid industrial expansion expected to contribute about half of future demand growth for aluminium and copper.....

....the IMF which also said there was little evidence that speculative investments were a significant driver of price movements......

......the money flooding in to commodities through mainly index trades has had a troubling effect on the performance of those indices, meaning banks have been forced to plough resources into developing new kinds of commodities bets to continue attracting investors.

More than $150bn has flowed into commodity markets over the past five years, mostly commodity indices, which reflect the prices of a basket of commodities that mainly include oil, gas, gold, copper, sugar and grains, much in the way the FTSE 100 reflects the share prices on the top 100 companies listed in London.