Goldman sees oil averaging $141 in second half

Says fundamentals argue in favor of WTI prices continuing to move higher

NEW YORK (MarketWatch) — Goldman Sachs once again issued a provocative forecast for the price of crude oil Friday, saying a barrel is likely to average $141 over the second half of the year — a further 10% or so above the latest in what’s been a string of record highs.

Making their projection on the same day that Saudi Arabia — the world’s biggest oil producer — declined to raise output and that crude futures crested near $128 a barrel for the first time, Goldman commodities analysts Jeffrey Currie, Giovanni Serio, David Greely, Allison Nathan and Samantha Dart said the oil market appears to be in the midst of a historic repricing.


To balance trend global growth in gross domestic product pegged at 3.8% against trend supply growth of 1%, prices would need to rise an average 14% from current levels during the second half of the year, according to Goldman’s calculations.

“This time we cannot simply make the argument that long-dated prices will rise until they reach a point that motivates large-scale investment in non-conventional resources, as over the past four years the industry has hit significant constraints on scalability of these technologies,” the Goldman analysts wrote in a research report.

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