$100 oil imminent but new record high years away

LONDON/NEW YORK: Oil is expected to hit $100 a barrel this quarter, but a new record high above $147 is far less likely any time soon, a poll of investment managers and bank analysts showed on Wednesday.

Investment managers are as bullish as investment bank analysts about the prospects for ICE Brent futures, which are trading near $98.

Brent hit a 27-month high on Wednesday following production interruptions in Norway and Alaska, while growing global demand raised expectations of tighter supplies.

"We don't see too much supply coming into the market," said Alex Moiseev, chief investment officer at Dighton Capital Management, a managed futures firm based in Switzerland.

"$100 is an almost immediate target." Jeremy Charlesworth, chief investment officer at Moonraker Fund Management, a London-based commodity fund of hedge funds, expects to see Brent touch $100 by the end of the first quarter.

"We will have a little bit of a pull-back but the recovery is definitely there," he told Reuters. "I think it's a bit like 2004 when we had a few stop-starts."

There was a strong divergence among respondents as to when they next saw U.S. crude oil prices reaching a new record high of over $147. U.S. crude is now trading at around $91 due to high inventories at its delivery point in Cushing, Oklahoma.

John Kilduff, a partner at New York-based hedge fund Again Capital, said the second half of 2012 was a reasonable target for a record high for U.S. oil prices, but Adam Sieminski, an energy analyst at Deutsche Bank in the United States was far more bearish medium term.

SPARE CAPACITY "Short of some massive geopOlitical event I don't see oil hitting $147 in the next few years," he said. "The difference this time is there is far more spare OPEC production and global refining capacity."

The majority of buy-side respondents saw a new high reached in 2013 or 2014. Christopher Wheaton, manager of the Allianz RCM Energy Fund, who chose 2013, said that, longer term, the world needed higher prices to choke off demand.

"The problem is that a lot of the nations where you have the biggest increases in demand you also have subsidised fuel," he said. "So if demand is to be cut off, prices will have to climb to all-time highs in the OECD nations first."

Colin O'Shea, head of commodities at UK-based asset manager Hermes, went for 2014, arguing that it would take a few years to reduce spare capacity, which would then induce a price response.

"We also need quite a bit of demand growth to maintain levels of $140-$150," O'Shea said.