Goldman sees new oil rally after predicting drop
****** Now does this surprise any of us.. For SIOR we are golden with $95 and up oil... 450 million in reserves we could sell out for .04 pps and it only cost a buyer 20 million for 450 million plus in reserves considering GS expectation for the price of oil to go back up as demand continues to tighten through 2012. That would be perfect timing for SIOR dont you think????? *****
tweet3EmailPrint..On Friday May 6, 2011, 11:12 am EDT
By Dmitry Zhdannikov
LONDON (Reuters) - Goldman Sachs, which in April predicted this week's major correction in oil prices, said on Friday that oil could surpass its recent highs by 2012 as global oil supplies continue to tighten.
The Wall Street bank, seen as one of the most influential in commodities business, said it did not rule out a further limited short-term fall in oil prices if macro-economic data, which it said had sparked this week's crash, continued to disappoint.
News of Goldman's mid-term outlook on Friday prompted a $1 a barrel jump in oil prices, helping oil to pare some of its earlier heavy losses.
Oil prices seesawed on Friday, turning positive on better than expected U.S. jobs data, which eased fears about global economic recovery that led to a 10-percent price crash on Thursday.
"It is important to emphasize that even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year," Goldman Sachs' analysts said in a research note.
"We continue to believe that the oil supply-demand fundamentals will tighten further over the course of this year, and likely reach critically tight levels by early next year should Libyan oil supplies remain off the market," it said.
It said it believed that this week's correction in oil prices, which fell from above $125 per barrel of Brent crude to below $106 on Friday, was sparked by disappointing economic data releases and U.S. oil inventory data.
"The sell-off yesterday (May 5) has likely removed a large portion of the risk premium that we believe has been embedded in oil prices, which could suggest further downside may be limited from here."
