Oil Will Test $100 Within Next Year: BofA Vice Chairman

Crude oil is near its highest level since 2008, and Tom Petrie, vice chairman of Bank of America Merrill Lynch, expects the hot commodity to test $100 in the next year.

“We’re in a situation where OPEC is very much back in the driver’s seat,” Petrie told CNBC Wednesday.

Quantitative easing is a test for [OPEC] like the bond market. Do they really want to have their purchasing power, the dollar, eroded by QE2?” he added.

Petrie is not alone in expecting the price of oil to increase further. In its 2010 World Energy Outlook, the International Energy Agency (IEA) predicted oil prices could exceed $100 a barrel in 2015 and $200 a barrel in 2035.

“If you look at the BRIC countries - Brazil, Russia, India, China - and the Middle East, in the next two decades the increase in their consumption will almost equal the level at which we in the US are consuming,” Petrie noted.

He said accommodating that kind of growth would be very difficult, with the resources currently available.

“Today at 85, 86 million barrels a day, the average fields are close to three decades old. They’re very mature, and we’re not finding the replacement for those great old reservoirs that sustained us in times past,” he explained.

As for alternative energy options, Petrie does not think they will make an impact for a “long time.”

“That doesn’t mean we shouldn’t be pursuing them,” he added, “but let’s be realistic about the timeframe.”