Oil prices could spike to $150 a barrel: Saudi Arabia

Saudi Arabia warned oil prices could spike to beyond the near $150 record high of 2008 within three years as it joined other energy to boost production over the long term.
Energy ministers and officials at the Group of Eight energy summit wrapped up the two-day meeting by urging the industry to pump money into projects to expand capacity despite the credit crisis, which has put the brakes on investment.
The meeting came as oil prices hover at a six-month high of over $60 a barrel, but producers fret that it remains below the $75 level needed to spur investment while consumer nations fear further rise in prices could hurt global economic prospects.
The recent rally in prices is expected to have eased OPEC concerns about high inventories and weak demand, and OPEC officials have suggested an output cut is unlikely at a Thursday meeting, though Libya says that possibility still exists.
Saudi Arabian Oil Minister Ali al-Naimi said the world was heading for a fresh spike after the current phase of faltering demand and lower prices, which he said reflected the economic downturn rather than being an indicator of things to come.
"We are maintaining our long-term focus rather than being swayed by the volatility of short-term conditions," he said in prepared remarks at the summit.

"However, if others do not begin to invest similarly in new capacity expansion projects, we could see within two-to-three years another price spike similar to or worse than what we witnessed in 2008."
Naimi painted a bleak picture of the investment scenario, saying low prices, weak demand, high costs, tight credit markets and energy policies focused on alternative fuel sources had all combined to hurt spending on new projects.
GLOBAL OIL AGENCY
The Saudi warning was echoed by a top IMF official, who forecast price spikes over the medium-term would follow relatively stable markets in the short-term.
"With long time-to-build lags, significant setbacks to oil investment today could set the stage for future sharp price increases," IMF First Deputy Managing Director John Lipsky said.
He said energy investments were likely to remain subdued in 2010, after an expected decline in 2009. The International Energy Agency predicts investment in oil and gas exploration and production will fall 21 percent in 2009.
Paolo Scaroni, CEO of Italy's Eni, said a solution could be to create a global oil agency representing producers and consumers that would combat price volatility and ensure investments keep flowing into the energy sector.