With oil prices moving as high as they have over the past year, many of you are probably wondering when will we see prices start to retreat? While the pain oil prices is causing at the pump is likely to have everyone wishing for a drop in oil prices, this may be something that is just not in the cards at this time.

There are a lot of reasons to believe that oil prices will continue to move higher, and according to Goldman Sachs, we could easily see prices move as high as $200 a barrel over the next two years.

The market was already trading higher today, but once the new analysis from Goldman came out, prices spiked even higher. Oil traded up as high as $122.73, and is currently trading at $121.89, up $ 1.92. At the current price, we have witnessed oil moving up pretty close to 100% over the past twelve months from the $62 a barrel it was trading at this time last year.

The US Department of Energy has also raised its estimate for the average cost of a barrel of oil this year. The EIA is now predicting that oil will average $110 a barrel in 2008, $9 higher than its previous estimate.

It’s always easier to grasp how much something is moving by seeing it visually, so let’s close with a current graph of oil prices…. as you can see, it’s been quite an impressive couple of months:

oil chart

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