As Investors we now have a clear signal on the long term trend :
Mr. Bush=92s visit here was, in many respects, a reprise of a trip he
made to the king=92s ranch in January, when he asked for an increase in
production and was rebuffed publicly by the oil minister and privately
by the king. This time, the Saudis again resisted Mr. Bush, while
offering at least the appearance of a concession.
Goldman Raises Oil Price Predictions
LONDON (Reuters) - Goldman Sachs, the most active investment bank in
energy markets, on Friday sharply raised its forecast for oil prices
in the second half of this year, citing tight supply.
The bank expects U.S. crude to average $141 a barrel in the second
half of 2008, up from a previous projection of $107, it said. Goldman
also forecasts prices will rise further next year to average $148.
"Tight supply conditions continue to be the primary catalyst for
higher crude prices," the bank said in a research note. "The near-term
outlook for oil prices continues to be bullish."
The Goldman forecast helped send crude prices to a record high of
$127.82 on Friday, analysts said. The 2009 estimate is the most
bullish among more than 30 banks regularly polled by Reuters.
Goldman, one of the first to point to triple-digit oil more than two
years ago -- a once unthinkable level -- earlier this month said oil
could shoot up to $200 within the next two years.
Its note on Friday said that despite the advent of alternative sources
such as biofuels, oil supply growth has slowed to 1 percent from about
1.8 percent in 2005 and less than the bank's forecast for 2008 world
GDP growth of 3.8 percent.
"Given this imbalance, long-term oil prices will need to continue to
rise," Goldman said.
Oil prices will bring natural gas prices up along with it.
The resulting inflation will lift gold.
from the market letter at http://www.amprogram.com
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