While Goldman, the firm that called for a “super spike” of oil prices this year to $150-$200 a barrel, has now reduced its forecast considerably, it still calls for oil prices significantly above their current level ($92 for Brent as of this writing) before year end.
Goldman Sachs Group Inc. slashed its forecast for crude oil prices in New York as concerns the global credit crisis may lead to weaker demand outweigh supply constraints.
The most profitable U.S. securities firm cut its three-month benchmark West Texas Intermediate crude oil estimate to $115 a barrel from $149, and its six-month target to $125 from $142. Still, it said the crude market was “substantially oversold” and current prices present “compelling buying opportunities.”
“We will stand by our bullish view on oil but just think it will now take longer to get to our previous price targets,” Goldman analysts, led by Jeffrey Currie, said in a Sept. 16 report. “The supply side of the market still remains severely constrained.”…
Goldman lowered its 2009 average oil price forecast to $123 a barrel from $148. Until now, Goldman had the highest WTI forecasts for 2009 among 35 analysts’ estimates compiled by Bloomberg.
However, the analysts gave themselves a huge out:
Oil could fall as low as $75 a barrel should a global recession take place, and could jump as much as $15 above Goldman’s targets because of shortages after plants restart from hurricane shutdowns, the securities firm said.