Oil jumps on bullish Goldman Sachs forecast

OIL has jumped to a seven-month high, after a leading forecaster described recent gains as only the “prologue” to a bigger rally.

Light, sweet crude for July delivery settled $US2.69, or 4.1 per cent, higher at $US68.81 a barrel on the New York Mercantile Exchange. July Brent crude on the ICE futures exchange settled $US2.83, or 4.3 per cent, higher at $US68.71 a barrel.

Spooked by a forecast of a “likely return to energy shortages” by Goldman Sachs, oil prices quickly recovered from yesterday’s steep losses and resumed the march towards $US70 a barrel.

…”The bison are running toward the edge of the cliff,” said Tim Evans, an analyst with Citi Futures Perspective. “There are no bullish fundamentals to explain this.”

The Australian