Crude prices continue to surge; hits $122/bbl

Sanjeev Prasad of Kotak Securities said, ‘There are severe implications for the economy, we’ve done some calculations at 110/bbl, there we are looking at gross under recovery of Rs 175000 crore, One lakh more than under recovery of fiscal year 2008. I have no idea as to what the government' s plan would be. I assume they will give more oil bonds and recover from upstream companies but that is no solution as it will push up cost of  borrowing from the market. There are hopes of the interest rates coming down but that won’t be the case if oil prices remain above USD 120/bbl.

John Kilduff, of MF Global said, “ Oil prices  will continue to move higher and this market has everything going forward no matter where you look. It gets the supply outage when it needs it and it gets the demand numbers to hang in there. The market gets the economic data to hang in there to create these anxieties about the whole picture even to the point whether the monetary policy is too loose right now.

Carter Worth of Oppenheimer & Company said, “We get  these important intermediate moves and the move from the February low is identical to the August and November move last yr and in each case it moved up by 30-35 dollars, we think that it stops here and if we have to place a bet here USD 130/bbl or USD 110/bbl, we think USD 110/bbl will come before.