Punters see oil reaching $200

2011-03-08 20:44

London - Paddy Power, Ireland's biggest bookmaker, said it had slashed the odds that a barrel of Brent oil will hit $200 this year to three to one as gamblers bet unrest in the Middle East will drive crude to record highs.

Rising unrest in oil-producing countries in North Africa and the Middle East has propelled crude prices in recent weeks to their highest levels since 2008, prompting Paddy Power punters to bet that $200 per barrel will be a reality soon.

Oil was trading at $113.31 per barrel on Tuesday.

"Three years ago we saw the same gamble when there were fears oil would break $200," a spokesperson for Paddy Power, which has businesses in Britain, Australia and Ireland, said on Tuesday.

"It never did reach $200 in 2008 ... But this time around the odds on such an occurrence are half what they were."

Brent crude hit an all-time high of $147.50 on July 11, 2008 before slumping below $40 less than six months later as the global financial crisis weighed on energy demand.

In June 2008, Paddy Power's odds of the benchmark European crude price hitting $200 by the end of 2008 were six to one.

The bookmaker opened its new book for crude to hit $200 about 12 days ago following requests from customers and has taken 62 bets on it since, mostly from British gamblers. Oil prices fell sharply on Tuesday on news OPEC might boost production to dampen prices. Saudi energy minister Ali Al-Naimi said the world's biggest exporter had enough spare capacity to meet shortfalls from crisis-hit Libya.

But rising tensions in Saudi Arabia itself have stoked fears that a wave of violent protests sweeping North Africa and the Middle East could even hit output from the world's biggest producer.