Goldman foresees a continue rise in oil prices due to continuing capacity constraints and continued strong demand from emerging economies. From Bloomberg:
Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report….
“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,” the Goldman analysts wrote in the report dated May 5….
“There are supply constraints with many producers, especially from non-OPEC struggling to find new reserves and China and Middle East demand keeps growing,” said Victor Shum, senior principal at energy consultant Purvin & Gertz Inc. in Singapore. “The fundamentals are prompting investors to get into oil in a big way and all that points to higher prices.”
Spare production capacity of the Organization of Petroleum Exporting Countries is low and the producer group’s exports may fall because of “lackluster” supply growth and rising domestic consumption in member countries, the Goldman analysts said.
“Non-OPEC supply is struggling to grow, with notable declines being seen in Mexico and Russia showing signs of rolling over following an extended period of rapid growth,” said the analysts from Goldman, the world’s biggest securities firm by market value….
“The core of our super-spike view has been that a lack of adequate supply growth coupled with price-insulated non-OECD demand growth” is leading to higher prices, the analysts said. That could result in a “sharp correction in oil demand,” the Goldman analysts said….
There’s a fundamental misperception that so-called speculators are driving prices to unjustified levels, the Goldman analysts said. “Unfortunately, we do not think the energy crisis will be solved by finding and punishing the big bad speculator.”
Commodity investors, the Goldman analysts wrote, are “helping to solve the energy crisis” by speeding up the process to for oil companies to spend more on energy projects and at the same time encourage efficiency.