Goldman Sachs Raises Year End Oil Price Forecast to $85 US

LONDON, Sep. 17, 2007 (Thomson Financial delivered by Newstex) — Goldman Sachs (NYSE:GS) has raised its oil price forecast amid near record high prices as the bank reckons demand is likely to exacerbate tight supplies looking ahead.

‘We are raising our end-of-year (WTI) oil (three month) price forecast to 85 usd per barrel from 72 usd, with significant risks of a spike above 90 usd,’ said analysts at the investment bank.

The only risk to its forecast, said analysts in a note this morning, is that wider financial market turbulence might batter demand to such levels that prices take a hit.

The bank laid blame on OPEC in particular for not reacting to supply tightness sooner, and said its decision last week to raise production by 500,000 bpd effective November 1 was too little too late.

For 2008, Goldman raised its average price forecast for the year to 85 usd from 73 previously.

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