The Associated Press
May 26, 2008 - 8:24 a.m.

LONDON - Soaring oil prices are increasingly the terminate of speculation, financier George Soros said in an conference published Monday.

The billionaire investor said the money pouring into the oil market has the look of a bubble, but it would not burst until both the United States and Britain are knocked into a recession.

“Speculation … is increasingly affecting the worth,” Soros told the Daily Telegraph.

“The price has this parabolic fashion that is characteristic of bubbles.”

But the cost of oil - which briefly reached new high of more than US$135 a barrel Thursday - is unlikely to fall dramatically until the U.S. and British economies begin contracting, the paper quoted Soros as sententious precept.

Soros has frequently been a voice of gloom as the U.S. frugality slows amid a wrenching housing crisis and tightening credit. But pessimism hasn’t stopped his fund from making circulating medium.

According to Institutional Investor’s Alpha Magazine, the Quantum Endowment Fund, which Soros created but not at all longer manages, made US$2.9 billion last year by returns of over 30 per cent.