Bullish analysts at Goldman Sachs have raised their oil price forecast for 2009 and 2010, on confidence that a new and sustained upturn is underway.
The global investment bank and securities firm said on Friday that it has raised its 2009 forecast to a $59 a barrel average, up from an earlier prediction $50. For 2010 the broker lifted its forecast to $80 a barrel, up from $70 a barrel as previously predicted.
Going into 2011 it foresaw the price of a barrel flirting with $95.
More specifically, Arjun Murti, head of Goldman Sach’s Americas energy team – the man responsible for forecasting an oil ‘super-spike’ back in 2005 – upgraded his estimate to $70 a barrel, from $60 for as early as the fourth quarter of 2009.
Meanwhile Murti’s London-based colleagues – in a note published on June 3 – saw prices up to as high as $85 a barrel this year
Goldman Sachs said that it was raising its outlook on continued confidence in the market, as a result of an increasing energy shortage and a wider global economic recovery.
In what was a rollercoaster year for oil traders, prices reached record highs above $147 a barrel back in July of last year, but then proceeded to fall into freefall, slumping to touch multi-year lows in December – down nearly as low as $32 a barrel.
Since the turn of the year however, prices have rebounded following a period of stability, climbing just this week to seven-month highs.
In line with the market trend, Abdalla el-Badri, Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), said Thursday that the producer-cartel saw prices up acutely between $70-$75 a barrel before the year end – on continued hopes of economy recovery and a weak dollar.
However, not everybody close to the issue remains as optimistic as Goldman Sachs.
Nobuo Tanaka, Executive Director of the International Energy Agency (IEA), said Friday that global demand for oil will not necessarily return quickly, even if activity begins to pick up.
In the near-term, a change in oil fundamentals may also play a significant role. “U.S. inventories are increasing again and U.S. demand destruction is going on. This is in our view a major risk for crude-oil prices in the near term,” said Eliane Tanner, of Credit Suisse Group AG, Zurich.
Following a government report, released on June 3, disclosing that U.S. inventories unexpectedly rose last week on the back of a drop off in fuel consumption, traders are waiting with baited breath to see possibly the most bearish decline in prices since February.