Goldman Sachs and $150 to $200 Oil (Part II) (GS)
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…
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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
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
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McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
