Oil bears hard to find after market's record run

By Jane Merriman - Analysis

LONDON (Reuters) - Bears are a rare breed, but not yet extinct in an oil market where prices have doubled in the past 12 months and risen by a quarter this year.

History shows price booms do not usually run on uninterrupted.

But for oil, which has been rising since 2002, many of the elements that could bring prices down are still missing.

"Until there's some definite evidence of a surplus growing somewhere in the system, prices will continue testing up," said Paul Horsnell, head of commodities research at Barclays Capital.

Investment bank Goldman Sachs has predicted a rise to $200 a barrel over the next six to 24 months, and other energy analysts see high prices for years to come.

There are a few analysts pointing to price-cooling factors.

"The basic fundamentals are already very much in place for prices to move lower," said Tim Evans, energy analyst at Citigroup.

"Inventories are above the five-year average in terms of days of supply coverage, supply may grow in excess of 3.0 percent this year, more than double the 1.5 percent growth that the International Energy Agency forecasts for global demand."

There is so far little evidence the price surge has had a major impact on consumption, which has become more responsive to levels of gross domestic product (GDP) growth than prices.

But in the United States, the world's biggest energy consumer, the combination of high prices and slower GDP growth is having some effect.

Higher prices for gasoline and the sluggish economy is forecast to hit U.S. oil demand through the summer driving season more than expected, the U.S. Energy Information Administration has said.

The EIA expects total petroleum demand, which includes diesel fuel and jet fuel, in the current quarter to be 90,000 barrels per day less than it forecast last month and down 170,000 bpd compared to the second quarter last year.

For 2008 as a whole, demand is forecast to fall by 190,000 bpd, 90,000 bpd more than the agency's forecast last month.

Lastest U.S. EIA data on fuel inventories for the week to May 2 showed a 5.7 million barrel rise in crude oil stocks, while gasoline stocks rose by 800,000 barrels.

High oil prices are cited as a factor pushing the U.S. stock market lower, because of fears record oil will dampen demand from consumers already hurting from a housing slump.