Goldman Sachs (GS), king of the oil bulls, has raised its forecast for oil prices in the second half of this year to $141 from a previous estimate of $107. For those without a calculator handy, that is an increase of 32%.
The forecast does make sense no matter how unfortunate that may be. With oil at $125, it will only take modest interruption in supply caused by militias in Nigeria or mad bombers in Iraq to push the price up again.
So far, major Western nations have not been able to come up with a policy for bringing down oil prices. That may be because there is not one. That is, short of threatening to withdraw military and other aid from OPEC countries.
That may be next.
Douglas A. McIntyre
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