[DantesPeak]

Curiously, despite the headline number of $200 oil during a superspike caused by supply disruptions, Goldman also sees the possibility of $60 oil under normal conditions - whatever those are.

$this->bbcode_second_pass_quote('', 'N')ew 'super-spike' might mean $200 a barrel oil
Goldman's projections foretell persistent turbulence in energy prices

By Steve Gelsi, MarketWatch

Last update: 1:42 p.m. EST March 7, 2008

NEW YORK (MarketWatch) -- With $100-a-barrel here for now, Goldman Sachs says $200 a barrel could be a reality in the not-too-distant future in the case of a "major disruption."

Goldman on Friday also boosted by $10 the low end of its 2008-2012 projected range for crude to $60 a barrel -- significantly lower than current prices, to be sure, but a possible mark for oil if "normalized" trends return to the marketplace.

With the dollar's fall continuing and financial markets roiled by the credit crunch, commodities like oil have been drawing the fancy of increasing numbers of investors. Accordingly, Wall Street firms have been eager to adjust forecasts to incorporate fresh data on the global economy and energy supplies.

Goldman analysts Arjun Murti, Kevin Koh and Michele della Vigna said prices have advanced more quickly than Goldman had forecast back in 2005, when it predicted a range of $50 to $105 a barrel as part of its "super-spike" oil theory.

"As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150-$200 a barrel oil prices," Goldman said.

[DantesPeak]

More details:

$this->bbcode_second_pass_quote('', 'T')he analysts say $135 a barrel is now the high end of the spike range, but said a rebound in U.S. economic growth or major oil supply disruption "could lead to $150 to $200 a barrel oil prices."

"In our March 2005 'super-spike' report, we first advanced our view that oil markets had likely entered a multi-year 'super-spike' period that would result in oil prices trading within a $50-$105/barrel price band; we characterized the upper end of the band as more likely to be driven by geopolitical turmoil and that recession was a key risk to our view," the analysts wrote. "In fact, oil prices have reached $100/barrel without extraordinary turmoil ('normal' turmoil we have always incorporated into our views) and the U.S. currently appears to be in recession."

The equity analysts' view that oil will average $95 a barrel this year, up from a prior $80 forecast, brings it in line with the 2008 forecast of Goldman's commodities research team. In a separate report this week, the commodities analysts reiterated that they see crude averaging $105 a barrel a year from now.

[PopeGideon]

60 to 200.

Nice range.

Anybody else saying that would be laughed out of the room.

The way I see it, the maximum possible range is probably 60 to 250 or 300.

So what GS did was recognize that there is way too much demand for oil to ever drop below 60, note that it's 106 now, note further that investors are all getting frothy looking at oil's spike, note that every major oil producer in the world out side of NA and NS are politically unstable, and conclude that 200 is not an unreasonable number to get to if a few breaks go the wrong way.

Brilliant.

It's like your lawyer tell you that your odds of losing the case are from 5 to 90.

Thanks for the help GS.

[emersonbiggins]

$this->bbcode_second_pass_quote('DantesPeak', 'G')oldman also sees the possibility of $60 oil under normal conditions - whatever those are.

[steam_cannon]

$this->bbcode_second_pass_quote('DantesPeak', 'C')uriously, despite the headline number of $200 oil during a superspike
caused by supply disruptions, Goldman also sees the possibility of
$60 oil under normal conditions - whatever those are.

[mididoctors]

Goldman sachs attempts at appearing as the all seeing prophets of the market boarder on fraudulent market manipulation.

I agree 60-200 dollar range amounts to saying the price could be anything and then claiming your right no matter what..

crowd of jerks who need de-selection

I hate them and their smug know all attitude... which they trade on for vast profit despite contributing f**k all to the greater human good

Boris
London

[mididoctors]

$this->bbcode_second_pass_quote('PopeGideon', '6')0 to 200.

Nice range.

Anybody else saying that would be laughed out of the room.

The way I see it, the maximum possible range is probably 60 to 250 or 300.

So what GS did was recognize that there is way too much demand for oil to ever drop below 60, note that it's 106 now, note further that investors are all getting frothy looking at oil's spike, note that every major oil producer in the world out side of NA and NS are politically unstable, and conclude that 200 is not an unreasonable number to get to if a few breaks go the wrong way.

Brilliant.

It's like your lawyer tell you that your odds of losing the case are from 5 to 90.

Thanks for the help GS.

[heroineworshipper]

Well it did briefly fall quite a bit in Greenspan's final year & giant SUV's were definitely out. Helicopter Ben has been quite a different story & giant SUV's R back.

A few ticks of the interest rate towards European levels & people would go back from giant SUV's to medium SUV's. If the average commuter SUV under Bernanke shrunk by maybe 10ft, oil could drop very fast.

[cube]

$this->bbcode_second_pass_quote('PopeGideon', '.')...
The way I see it, the maximum possible range is probably 60 to 250 or 300.
...

[PopeGideon]

Cube - that's a fascinating point.

Anybody with money in the oil futures market has got to think about that.

When the nickel market went nuts, the controlling powers stopped all trading and allowed some players to dishonor futures contracts. I don't remember the details, but the message was clear - at some point, the old rules will be thrown out and screw you if you were smart enough to be long when the rules get sacked.

You think 300?

Wow.


I'd think more like 150.

[Armageddon]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('PopeGideon', '.')...
The way I see it, the maximum possible range is probably 60 to 250 or 300.
...

[DantesPeak]

$this->bbcode_second_pass_quote('', 'C')ommodities Face `Explosive Rallies,' Oil at $175, Goldman Says

By Claudia Carpenter

March 14 (Bloomberg) -- Commodities may have ``explosive rallies'' in the next couple years, with crude oil rising to $175 a barrel, according to Goldman Sachs Group Inc.

Political decisions on money flows, labor and technology are ``substantially constraining supply growth'' of commodities, Goldman analysts including Jeffrey Currie in London wrote in the report today. ``This will likely support the ongoing structural bull market in commodities until these policy-driven investment constraints are removed and/or demand is adjusted.''

Commodities are in their seventh year of gains as underinvestment in refineries, mines and land sent prices for oil, gold, platinum and wheat to records. More natural resources are controlled by political entities than at any time since the 17th century, according to the Goldman report.

Crude oil rose to a record $111 a barrel yesterday. The $175 a barrel ``represents the price level required to maintain trend economic growth against our anemic supply growth forecasts, assuming growth in the U.S. re-accelerates early next year,'' Goldman said.

Last Updated: March 14, 2008 07:48 EDT

[frankthetank]

I think as long as gas stays where its at, then oil can do what it wants. J6P only looks at those numbers on the sign.