Oil Poised for Price ‘Breakout’ Higher, Goldman Says
Oct. 13 (Bloomberg) -- Crude oil prices are poised for a “breakout” from a five-month trading range as importing of goods for Christmas retailing bolsters diesel demand, Goldman Sachs Group Inc. said in report.
Futures in New York have traded “in a very tight band” capped at $75 a barrel since mid-May, Goldman analysts including London-based Jeffrey Currie said in a report today.
“Diesel demand typically rises by mid-to-late October, as shipping of goods to restock shelves in anticipation of the Christmas retail season starts to pick up,” they wrote. “The market is increasingly focused on evidence of a rebound in distillate demand” which would “likely be the primary catalyst to create a sustainable breakout above the recent trading range.”
Crude prices today reached a seven-week high of $74 on growing confidence in a global economic recovery. Gains have been kept in check by above-average inventories of distillate fuels, such as heating oil and diesel, which are at their highest in 26 years in the U.S.
In another report e-mailed earlier today Goldman kept its forecast for crude to reach $85 a barrel by the end of this year on “modest” improvements in global demand in the fourth quarter.
http://www.bloomberg.com/apps/news?pid=20601072&sid=amRHVlbSydbI
Goldman raises oil demand outlook, maintains price
Goldman said Chinese oil demand has risen to its levels before the global economic recession, which was triggered by financial crisis in the third quarter last year.
"Accordingly, we are raising our demand forecasts," the bank said in its commodities research note.
"Importantly, the permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base, suggesting a fourth quarter 2009 demand level that we originally thought would take until the third quarter 2010."
Goldman now expect global oil demand to average 85.106 million barrels per day in the fourth quarter of 2009.
Demand will average 84.727 million bpd this year, a dip from 86.304 million bpd last year, then rise to 86.405 million bpd next year, it said.
The bank maintained its oil price forecast because the higher demand will be met by an increase in supplies, especially the former Soviet Union producers.
It expects U.S. crude futures CLc1 will reach $85 barrel by the end of this year and average $90 in 2010
http://www.reuters.com/article/BROKER/idUSLP42843920090925
Goldman predicts repeat of 2008 commodities spike
Goldman Sachs said it expects commodity prices to spike sharply higher next year, mimicking the moves in 2008 when oil almost hit $150 a barrel and other commodities touched a series of all-time highs.
The U.S. bank said potential supply shortages created by years of underinvestment have been exacerbated by the global financial crisis and tight credit conditions.
"As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the market balanced," Goldman Sachs analysts said in a research note dated Aug 5.
http://www.arabianbusiness.com/564087
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