Goldman Sachs says $200/barrel crude oil is possible
Analyst says $150-$200 crude may happen within two years
By Tom Stundza -- Purchasing, 5/6/2008 9:39:00 AM
Crude oil prices may increase to as much as $200 a barrel within two years because of a lack of adequate expansion of supply, forecasts Goldman Sachs Group analyst Arjun N. Murti in a new report.
With crude trading around $120 this week, New York-based Murti writes that “the possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty.''
A Bloomberg news service report says soaring energy costs have so far failed to stem rising consumption in developing nations, with demand led by China, India and the Middle East. “There are supply constraints with many producers, especially from non-OPEC struggling to find new reserves and China and Middle East demand keeps growing,” acknowledges Victor Shum, senior principal at energy consultant Purvin & Gertz in Singapore when contacted by Bloomberg. "The fundamentals are prompting investors to get into oil in a big way and all that points to higher prices.''
Goldman Sachs has boosted forecasts for benchmark spot price of West Texas Intermediate (WTI) oil in 2008 to $108 a barrel from $96, in 2009 to $110 from $105, in 2010 at $120 and in 2011 at $110.
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