Goldman Sachs and $150 to $200 Oil (Part II) (GS)

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Goldman Sachs (NYSE: GS) has come out and updated its "oil super-spike" prices today.  In fact, it ponders whether or not the super-spike end game has begun.  We covered part of this yesterday, and today the full details were sent out.

The firm now notes that we could see $150 to $200 per barrel of oil in the next six to 24 months.  The note says the current energy crisis may be coming to a head.  It cites lack of adequate supply growth and this notes that a needed demand rationing in the OECD areas (in particular the U.S.). 

This might not even big too big of a stretch now considering the recent comments from OPEC’s head.

So this $150 to $200 level seems increasingly likely… even though the brief summary is "though predicting the ultimate peak in oil prices as as the remaining duration of the upcycle remains a major uncertainty."

While this $150 to $200 level is its super-spike target, the firm has raised its 2008 spot target to $108 per barrel of West Texas Intermediate crude (previous was $96) and it has raised Brent Sea crude to $108 as well (from prior $95).

Well, this may explain some of the rapid rise in oil prices in the last two trading sessions… just when it looked like the oil prices were going to get a reprieve.

No wonder T. Boone Pickens says oil stock prices are more representative of $75 oil rather than $100 oil.
Now we know Exxon’s hiked dividend has some support.

Jon C. Ogg
May 6, 2008