Following Goldman Sachs and Merrill Lynch raising their oil price forecasts for 2005 and 2006, David Thurtell, research manager with Commonwealth Bank of Australia, said the possible oil output reduction due to the Iran nuclear issue would push the international oil price up to 75 USD a barrel in the next three months. As a response to his estimation, oil prices on the New York Futures increased by 5 cents a barrel on August 22.

Thurtell's analysis was prompted by the scenario that Iran resumed its nuclear scheme last week, which has been warned of economic sanctions by the UN and of military threat by the US. Thurtell reckoned that Iran would possibly cut its oil production to cope with the pressure both from the UN and the US. He went further to put forward a prospect of an immediate rise of oil price to 75 USD a barrel once Iran, OPEC's second largest oil producer, pumped less crude oil by 1 million barrels a day.

Deutsche Bundesbank, Germany's central bank, stated the rising oil as a major risk periling the world economy in its monthly report in August. Iran's reduction in crude oil export will lead to soaring oil price, which may fuel the inflation in oil importing countries, so as to menace the global economic growth.

Before making this bold forecast, Mr. Thurtell estimated the oil prices to top 65 USD in July, which had proved to be a successful forecast.

By People's Daily Online