This morning Goldman Sachs has made some major changes to its integrated oil and refining universe to reflect new commodity price assumptions, as well as changes in many cost structures ahead. The overall rating is still listed as "Attractive" for both integrated oil and for refining.
Goldman Sachs is calling it as now being in Phase 2 of a multi-year "Super-Spike" era. It says the lower ends of the $50 to $105 per barrel oil and $8 to $15 per barrel USGC refining margin range has not caused demand to fall. Its base case forecasts now reflect the upper portion of that band with $80 per barrel oil in 2008 and $90 per barrel in 2009. It also sees refining margins at $14 per barrel in 2008 and $16 per barrel in 2009.
Goldman Sachs has raised the high-end of its super-spike price range now and lists $135 per barrel of oil as the high-end, $25 per barrel in refining margin, and even lists $4.50 per gallon as the high-end of a super-spike price on gasoline at the pump. It does clarify that prices may not need to go this high to lower demand, but says that this similarly is not a ceiling.
Goldman Sachs also named a slew of companies we will include in an updated story. Over the weekend, we noted a scenario that could justify even higher prices than this, and just last week T. Boone Pickens called for higher oil prices without any definitive targets being noted.
Jon C. Ogg
September 17, 2007