Jim Rogers, the co-founder of George Soros's Quantum hedge fund, says that oil prices could reach $100 a barrel this year. Merrill Lynch's Francisco Blanch says no way.

"Unless somebody discovers something very quickly and very accessibly, we're all going to be dumbfounded at how high the price of oil will go, including me," Rogers said during an interview in Singapore. Fighting in Lebanon between Israel and Hezbollah forces, backed by Syria and Iran, helped send New York crude oil for August delivery to a record $78.40 on July 14 amid concern the violence may spread across the Middle East, the region that produces more than 30 percent of the world's crude. Not to worry, says Blanch, the head of commodities research at Merrill, the world's biggest brokerage.

Oil supplies would have to stop from a country like Iran, the second- largest Middle East oil producer after Saudi Arabia, to drive the market higher, he said.

"It's unlikely we will see another price rally from here, unless the current conflict expands beyond its current borders," Blanch said during an interview in London. "You'd need physical disruptions, and large ones, to bring the price to $100. You'd probably need to lose Iran." A growing number of Wall Street traders are siding with Rogers. Bets on futures contracts for $100 oil tripled in the past three months, helped by demand for fuel from China, the world's fastest growing major economy. Oil has tripled in four years to $72 a barrel currently and gasoline pump prices reached $3 a gallon in the United States, threatening to damage economic growth.

Rogers said that the rally would accelerate as supplies decline from aging fields and new reserves become more difficult to find.

"Commodity investors looking for $100 oil will see it," said Philip Verleger, an economist who founded PK Verleger, an energy consulting firm based in California. Only a U.S. recession can stop the advance to $100 a barrel before the end of next year, said Verleger, also a visiting fellow at the Institute for International Economics in Washington. Oil prices have also climbed because of pipeline attacks in Nigeria and concern Iran might cut exports to fight efforts to curb its nuclear program. Iran says it seeks nuclear energy for peaceful uses. U.S. crude inventories are swelling as OPEC members pump almost as much as they can.

U.S. oil stockpiles are 9.5 percent higher than the average level of the last five years, according to the U.S. Energy Department. Investment in new rigs and refineries is paying off, increasing the cushion of spare capacity that protects against shortages. The International Energy Agency, based in Paris, estimates that OPEC's idle crude oil capacity will reach 4.2 million to 6.1 million barrels a day in 2011, up from about 2 million a day now. Oil at $100 a barrel is "a very low probability," said Tim Evans, an energy analyst at Citigroup in New York. The $100 level became a market benchmark in March 2005, when Arjun Murti, a Goldman Sachs analyst, wrote, "We believe oil markets may have entered the early stages of a 'super spike' period, which we now think can drive oil prices toward $105 per barrel." The report indicated a range between $50 and $105 through 2009.

Oil last closed below $50 a barrel in May 2005

The number of futures contracts bearing the option to buy crude at $100 this year is 53,047, triple the amount on April 21. The contract gives a buyer the right, but not the obligation, to buy a commodity at an agreed price within a set time period. Louise Yamada, an analyst who correctly predicted in July 2004 that oil would reach $67 within "months to years," said that she expected oil to reach $84 a barrel in the "short term," then keep rising. "I wouldn't be surprised to see oil in excess of $100," she said.