Goldman Sachs, which in April predicted this week's major correction in oil prices, said on Friday oil could surpass recent highs by 2012 due to supply tightness.
|||Goldman Sachs, which in April predicted this week's major correction in oil prices, said on Friday oil could surpass recent highs by 2012 due to supply tightness.
The Wall Street bank, seen as one of the most influential in commodities business, said it did not rule out a further limited decline in oil prices in the short term.
News of Goldman's mid-term outlook on Friday prompted a $1 a barrel jump in oil prices, paring some of its earlier losses.
“It is important to emphasize that even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year,” Goldman Sachs' analysts said in a research note.
“We continue to believe that the oil supply-demand fundamentals will tighten further over the course of this year, and likely reach critically tight levels by early next year should Libyan oil supplies remain off the market,” it said.
It said it believed that this week's correction in oil prices, which fell from over $125 per barrel of Brent crude to below $106 on Friday, was sparked by disappointing economic data releases and U.S. oil inventory data.
“The sell-off yesterday (May 5) has likely removed a large portion of the risk premium that we believe has been embedded in oil prices, which could suggest further downside may be limited from here”. - Reuters
Source: http://www.iol.co.za/goldman-oil-could-surpass-highs-1.1065459
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