(Corrects paragraph one to price to hit $150 this year, not
average for year)
* IEA coordinated oil release "purely political" -Guild
* Buying soft, Asian emerging markets
* Gold will continue to rise
By Ikuko Kurahone
LONDON, July 6 The price of physical crude oil
will hit $150 a barrel this year in the United States due to
unrest in North Africa and the Middle East, despite the
emergency oil stock release coordinated by the International
Energy Agency (IEA), a U.S. fund manager said.
Monty Guild, the chief executive of Guild Investment
Management, said the IEA's move did not change oil's
"Our opinion continues to be oil prices will reach $150
barrels this year due to the fighting near Saudi Arabia," Guild
told Reuters in a telephone interview.
He was referring to escalating violence in countries such as
Syria and Yemen. These countries are very small producers but
the market has been concerned about the spillover of the unrest
to Saudi Arabia, the world's top oil exporter.
North African producer Libya's oil supply has been disrupted
since February because of its continuing civil war.
Last month, the IEA, advisor for 28 industrialised nations
on energy policy, announced that member countries would release
60 million barrels of crude oil and refined oil products to
cover the lost oil supply from Libya and to pull down high
But international U.S. crude oil and ICE Brent crude futures
have risen to the levels above where they were before the IEA
announcement, after the sharp fall in the initial reaction to
"It has changed nothing. It is purely political," Guild
His oil price forecast refers to the average price to buy
physical crude oil in the United States. Physical crude oil
prices are $12-$15 per barrel higher than U.S. crude oil futures
CLc1 depending on grades of oil and the geographical
locations, he said.
U.S. crude futures were trading $96.93 a barrel by 1546 GMT
Guild also said Saudi Arabia has surplus capacity to boost
output volume when supply is tight but the quality of Saudi oil
might limit its reach in the market.
"Their oil is sour and very heavy that is very expensive to
refine. Therefore the prices they are offering are not good
prices," he said. "Prices are not attractive because cost of
transporting and refining the oil they are producing are so
high, so they are not offering any bargain."
Guild Investment Management, based in Los Angeles,
California, has about $150 million of assess under managements
for selected clients.
Its portfolio includes equities, foreign currencies, gold
and some precious metals mostly through exchange traded funds
The fund currently has an approximate 25 percent allocation
to the global oil and energy sector.
It has expanded its equity portfolio again to agriculture
and related stocks, such as fertiliser, and Asian emerging
markets such as India and Malaysia, after exiting these assets
in March to focus on energy and commodities.
Its current holdings include Brigham Exploration
Co. , Deethree Exploration LTD , Teucrium Corn
Fund , SPDR Gold Trust, ETFS Gold Trust and others.
Gold and agricultural commodities will continue to rise,
Guild said, as many countries, such as China and Russia, will
increase their holding in gold in their national portfolio.
Food prices will be supported due to expected growth in
demand from India and China, he said.
He also has a view that U.S. Federal Reserve's second round
of quantitative easing, or QE2, did little to boost actual
economy. The programme ended in June.
"To many observers it appears that all QE2 did was run up
asset prices of gold, oil, stocks, and some other commodities,"
(Reporting by Ikuko Kurahone)