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Gas prices high? Oil price survey points to more increases.

Gas prices could be headed higher as oil prices are set to rise, a new survey finds. High gas prices could threaten recovery.

By Sri JegarajahReporter, CNBC Asia Pacific / February 27, 2012

Gasoline drips from a nozzle at gas station Thursday in Lake Oswego, Ore. Oil prices hit a new nine-month high as the dollar fell and they're poised to go higher this week, according to a new survey of oil traders. At $4.24 a gallon, San Diego had the highest gas prices in the US.

Rick Bowmer/AP


Oil prices are poised to gain for the third straight week, undermining global equity market sentiment and threatening the fragile economic recovery, CNBC's weekly survey of market sentiment showed.

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A CNBC poll of analysts and traders showed 12 out of 16 respondents, or 75 percent, expect oil prices to rise this week. Three believe prices will fall and one expects no change. Though the bulls comprise the overwhelming majority, many are lightening long positions, or bets that prices will rise, as they believe the recent rally is showing signs of fatigue.

 "You have to trade from the buy side but I would be reducing my long positions ahead of the weekend," said Tom James, Chairman & Co-Founder, Navitas Resources, in an email on Thursday. "The fundamentals in the physical market don't support the current short term price." James added that he was looking to add long positions on any pullback in Brent crude to $115. "Target for the year is now $150 on longer term basis for Brent."

 Brent crude hit a record high in Euro terms last Thursday at 93.60 euros per barrel as supply concerns escalated. U.S. crude futures settled at just under $110 a barrel on Friday, recording their biggest weekly gain in two months. For the week, U.S. crude rose 6.3 percent, the most since the week to Dec. 23.

 Dhiren Sarin, Chief Technical Strategist, Asia-Pac at Barclays Capital, who correctly predicted Brent's move above $120, is switching to a more neutral bias for U.S. crude. "On balance, having been bullish for two weeks... we are sensitive to a correction or, in the least, a pause above $103.40/75" for WTI, Sarin said.

 However, John Licata, CEO and Chief Commodity Strategist at Blue Phoenix, expects U.S. crude futures to gain momentum over Brent.

 "WTI is about to see a rally at the expense of Brent as facts like France getting just 3 percent of oil from Iran and Britain not taking Iranian oil deliveries in 6 months cause a contract allocation shift into WTI," Licata said.

 This shift will further be fueled by a lack of refining capacity in the Northeast U.S. and concerns surrounding militant attacks on oil installations in Nigeria by the Movement for the Emancipation of the Niger Delta, Licata said. According to him, outside Iran, Nigeria is a "very big factor" for global oil markets because the U.S. is a big buyer of Nigerian crude.

Numerous respondents this week are warning higher retail gasoline prices could threaten the fragile economic recovery in the U.S.

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