Look’s like oil will be getting more expensive.

Kilduff: Get Ready for $100 Oil

Crude oil prices re-took the $70 per barrel level, yesterday, and they are poised to climb further. In fact, prices are likely to hit the $100 mark before year-end. Economic and geopolitical factors are at work, once again, to produce a return to triple-digit oil.

Why so?

Despite all the talk and analysis surrounding China’s economy, its appetite for raw materials and energy is being underestimated. China has been consistently using its vast currency reserves to lock up physical supplies of oil around the world. We have seen several high-profile loan agreements with sovereign nations whose repayment terms consist of oil and gas, not more Yuan.

On the geopolitical front, perennially unreliable Nigeria is becoming an even greater problem: mere separatist strife, with demands by local rebel groups for a greater share of oil revenues, may be transforming into another religious battle ground, pitting much of the Muslim northern part of the country against the predominantly Christian oil-rich south.

In addition, the devaluing dollar due to deficit spending will cause the price of oil to rise.