Everybody rides!!! (but then again....maybe not...)

[Dixie Flyer]

Crude May Rise to $120 in Six Months, Taqa CEO Says (Update2)

By Glen Carey

March 4 (Bloomberg) -- Crude oil may rise to $120 a barrel within six months due to the dollar weakness and global political tensions, the chief executive officer of Abu Dhabi National Energy Co. said.

``I think a trading range between $80 and $120 a barrel this year is about right,'' Peter Barker-Homek, the head of the United Arab Emirates state-controlled company, which is also known as Taqa, said in an interview in Dubai today. ``But with the softness of the dollar, and the occasional interruptions that you have because of politics, I think we could see $120 oil.''

In October, Barker-Homek said that crude would rise to $100 from $80 before the end of the first quarter because of unfettered Asian demand growth and possible supply shocks. Oil prices continued to rise today after the Taqa CEO made his latest forecast.

Crude oil for April delivery rose as much as 70 cents in earlier electronic trading on the New York Mercantile Exchange and was up 28 cents at $102.73 a barrel at 2:06 p.m. London time. The Organization of Petroleum Exporting Countries will meet tomorrow in Vienna, where members have already ruled out changing output.

The dollar traded near a record low versus the euro as traders increased bets that the Federal Reserve will lower interest rates by 0.75 percentage point this month. The U.S. currency was at $1.5217 per euro.

Sub-Prime Opportunities

The Abu Dhabi-based energy company, with $21 billion in assets, expects to grow its business this year by 25 percent, or $5 billion, and has plans to make acquisitions in Europe and the U.S., Barker-Homek said. ``In order to achieve our goal of being a $60 billion asset company by 2012, we have to grow our asset base by 25 percent year-on-year.''

The U.S. subprime mortgage crisis will provide state- controlled Taqa with investment opportunities over the next two to three years as smaller energy companies in the U.S. and Europe look to expand their energy assets without having to borrow from banks, he said.

Energy companies ``have to make some decisions about either sacrificing growth, in which case they will be compromising shareholder value growth, or look for merger of equals or take over candidates,'' Barker-Homek said. ``There are ample opportunities to grow the franchise.''

Persian Gulf sovereign wealth funds, whose coffers are swelling from the near-record oil prices, are snapping up stakes in banks battered by U.S. subprime mortgage losses. Citigroup Inc. was propped up in November by a $7.5 billion investment from the Abu Dhabi Investment Authority after losing almost half its market value.

Taqa plans to expand its crude oil production to 200,000 barrels a day of oil equivalent by 2009, up from its production of 160,000 barrels a day now, Barker-Homek said.