This is a partial transcript of "The Big Story With John Gibson," Oct. 12, 2004, that has been edited for clarity.

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JOHN GIBSON, HOST: Oil prices hit another all-time high today. It’s actually the sixth successive day of all-time peaks.

Joining me now for a closer look at the oil markets is "Forbes" Magazine’s Senior Editor, Bruce Upbin.

Bruce, the big question: so will the price of oil go higher?

BRUCE UPBIN, SENIOR EDITOR, "FORBES": It could go a little bit higher. People are saying it’s going to go to $60. I think we really need a big catalyst for that to happen. So, what we’ll probably see is it in the low 50’s for a while, and then start to — over the next year, as the economy kind of plateaus and China slows a little bit, you’ll see it start to trim back down to the low 40’s, maybe even the high 30’s by the end of 18 months’ time.

GIBSON: Bruce, is this really demand from the United States, from Europe, from China, from India, or is this the guys at the Merc speculating that prices could go higher and they’re pushing it higher, looking to make some money?

UPBIN: Well, everybody wants to blame the hedge funds, right? Because it’s easy to do; we don’t know what they’re up to right now; if their computer programs selling.

The Saudis are blaming the hedge funds (search), but Treasury Secretary Snow did say there’s probably a risk premium in there, a speculators’ premium of about $5, $6, to $10. So, that could be in there for sure, but there’s lots of other reasons this is happening. Hedge funds are not the main reason.

GIBSON: Yes, but $10? If Secretary Snow is right, $10 brings it down to $44. Not that that’s low, but it doesn’t take your breath away.

UPBIN: Well, when you got a hot commodity, and oil and sugar: they’re all hot. Oil is up 60 percent for the year. Any guy on Wall Street’s going to jump into it, so it’s not just hedge funds, it’s also mom and pops out there putting their extra money with their Merrill Lynch (search) guy or their Goldman Sachs (search ) guy into the commodities pit.

GIBSON: All right. But what turns that around?

UPBIN: Well, you’re going to see — hopefully you’ll see some demand slow down a little bit, which we don’t want to see actually be a stagnant economy, but just some other kind of other use of oil, more efficient use of it.

Hopefully, there will be some regulatory relief in the refining capacity and we’ll actually get the first refinery built in this hemisphere since 1976 in the U.S. And maybe we’ll see an openness in Russia of its production capacity: letting more Western oil companies in there to explore.

GIBSON: Bruce, here’s a question. If China, which is a developing country and not nearly as rich as the United States, and if India, a developing country and not nearly as rich as the United States, if they can afford $50 a barrel, doesn’t that tell the producer, "Well, America can afford much more?”

UPBIN: Well, I don’t know. I don’t know that our economy is a lot more able to absorb $50 oil than we were in the 1970s. We’re a lot more efficient now; there’s a lot more productivity with all the technology we put into place. So we can deal with it.

As you’ve seen, inflation has not gone out of control at $50 oil. It’s not great for the economy. Some Merrill Lynch economist said that it’s probably a ding of about half a percentage point on GDP growth. But we can deal with it.

GIBSON: All right. Bruce Upbin, "Forbes" Magazine Senior Editor.

Bruce, thanks a lot. Appreciate you helping us out.

UPBIN: Sure.

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