Seems that Goldman Sachs is convinced that the price of oil will...

Seems that Goldman Sachs is convinced that the price of oil will creep up next year to about US$ 90 for WTI crude and higher in 2011.
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Goldman tips oil to hit US$90


Reuters | Friday, 4 Dec 2009

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US investment bank Goldman Sachs expects oil prices to rise to an average $US90 a barrel next year, before increasing to U$110 in 2011, as strong growth in emerging market economies boosts crude demand.

In its first major oil price outlook since June, Goldman maintained its earlier 2010 forecast for West Texas Intermediate futures at $90 a barrel, citing factors such as slower-than-expected fuel demand recovery in developed economies, which has kept global crude stocks high.

Goldman expects oil prices to rise to $110 a barrel in 2011 as supplies are drawn down amid strong demand from emerging markets. The bank did not offer an outlook for 2011 oil prices in earlier reports this year.

"Overall, we leave our 2010 WTI crude oil forecasts largely unchanged at an average price of $90/bbl, but with lower prices at the start of the year and higher prices at the end," the bank said in a report.

US crude futures fell US33c a barrel to trade at $76.27 as of 12:01 p.m. EST (1701 GMT).

Goldman, which is among the most profitable commodities traders on Wall Street, lowered its 2010 price forecast for NYMEX natural gas futures to $6 per million British thermal units, down from a previous forecast of $7.30. The bank expects natural gas prices to rise to $6.50/mmBtu in 2011.

NYMEX January natural gas futures were trading around $4.50/mmBtu on Thursday.

To explain the downward revision for 2010 natural gas prices, Goldman cited higher-than-expected production of unconventional gas that has lifted supplies in spite of recently flagging investment in drilling.

Goldman also raised its forecast for metals prices, including copper and gold, and sees grain and oilseed prices trending higher.

ENDS