The price of oil will settle between $40 and $55 a barrel, said Paul Gulden, manager of the Pax World Growth Fund. "I see continued volatility in the oil sector, where a terrorist activity or other supply disruption could lead to a brief ‘super spike' in prices" of $100 or more, Mr. Gulden said in a teleconference call Tuesday.
Mr. Gulden outlined his views on how bad the shock in oil price will get and recommended a number of oil and natural gas companies and production-services companies.
"Is it possible? It is the ultimate goal of Osama bin Laden and al Qaeda to replace the Saud family in Saudi Arabia," Mr. Gulden speculated. "If it looks like they will be successful, you'd have a scare in the world oil markets (and a rise in price). Would it be sustainable? No."
"There is some fear factor in the price of oil ... and it will probably be there for some time," he added. Without the fear factor, he said, oil would be about $35. Light crude sold at about $54 a barrel this afternoon.
