Business

CRUDE EXPERT PREDICTING UNEXPECTED BREAKDOWN

DESPITE the $11.33 a barrel surge in the price of oil on Friday – when it hit a record $139.12 before retreating a drop or two – America’s leading auto industry expert fears that the price of oil is set for a sudden and dramatic collapse and is calling on Congress to act to prevent a damaging market crash.

David Cole, head of the Center for Automotive Research, in Detroit, a leading auto-industry think tank, believes that when the oil market’s unprecedented climb runs out of steam it will fall hard and fast.

“We have seen this before,” Cole said. “In the late 1970s the price ran up to previously unimaginable heights and once it reached a peak it came crashing down, way below the levels traded before prices started to rise.”

With analysts predicting further spikes as high as $150, Cole’s warning seems unusual. But many analysts agree that as fast as prices have risen, they could soon come crashing down.

Tom Kloza, chief oil analyst with the Oil Price Information Service, believes such a move could be some way off but agrees that fears of a severe correction are well founded: “I think that prices could certainly give up huge chunks of their gains,” Kloza said.

While all industries from aviation to car manufacturing, to transport and beyond are calling for cheaper oil, Cole believes a price collapse could cause as much economic turmoil as the rapid increase in prices seen over the past year.

“When prices collapsed in the late ’70s all investment in alternative fuel technology ceased and essentially that led the auto industry to the mess it is in today. The same would happen if prices fell below $50 a barrel today.”

Cole, with the support of leading US auto industry executives, is expected to call on Congress to set a floor for the price of oil. “If we set a floor of $50 a barrel, the investment the big auto manufacturers are making in alternative technologies will be protected,” he said. James Doran

No serve

No, James Dolan has not purchased the US Open.

But the average tennis fan could be forgiven for thinking the Cablevision CEO did make such a deal after they catch a glimpse of the official logo (below) for this year’s tournament – a tennis ball with a flame tail soaring over the Radio City Music Hall marquee.

“It’s about entertainment and about New York,” said one person familiar with the thinking behind the design. “Both the US Open and Radio City are Big Apple entertainment icons.”

Perhaps. Or maybe the designer knew that an open casting call for children age 12 and under to sing the national anthem live at Arthur Ashe Stadium will be held at RCMH tomorrow from 9 a.m. to 2 p.m., the same time tickets go on sale. Richard Wilner

I ò NY

Expect Peter Thiel, Paypal co-founder and Facebook angel investor, to start spending a lot more time in New York City.

The Silicon Valley venture capitalist plans to move half his San Francisco hedge fund, Clarium Capital Management, to Manhattan in an effort to keep up with East Coast trading hours, On the Money has learned.

The $3 billion global macro fund already keeps a handful of workers in a satellite office at 152 West 57th St. But that space isn’t big enough for the added staff so Clarium is looking for a new home. Kaja Whitehouse

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