Goldman forecast: Oil at $85 a barrel by year's end

That pullback in oil prices Wednesday? Never mind.

Crude prices have surged again today, making another run at $70 a barrel, egged on in part by a consumer-unfriendly forecast from Goldman Sachs Group.

It was Goldman, you may recall, that a year ago was forecasting a potential "super spike" in prices to between $150 and $200 a barrel within two years. That prediction helped drive oil to its record of $145 a barrel in early July -- before the bubble finally burst.

Now, Goldman is bullish again, though not on the same scale as a year ago.

From Bloomberg News:

Crude oil rose to a seven-month high after Goldman Sachs said prices may reach $85 by the end of the year as demand recovers and supplies shrink.

Oil climbed more than 5% after the bank increased its year-end forecast from $65 a barrel and withdrew its prediction that prices will dip prior to a rally.

"As the financial crisis eases, an energy shortage lies ahead," Goldman analysts Jeffrey Currie in London and David Greely in New York wrote in a research report e-mailed today. The bank set a 12-month price target of $90 a barrel, up from $70, and introduced a forecast of $95 for the end of 2010.

Near-term oil futures were up $3.32, or 5%, to $69.44 a barrel about 11:30 a.m. PDT.

Crude had tumbled Wednesday amid a broad decline in commodity prices, after the latest government data on oil supply and demand were decidedly bearish.

But commodity bulls, and stock market bulls, aren’t worried about the present. They’re pinning their hopes on the second half of the year, when they expect those "green shoots" of economic recovery to turn into a verdant field.

-- Tom Petruno

Comments

[Wm.D. Goldsberry]

The Goldman Sachs group must need money again !!
This group should be charged with the damage that occured from their last forecast , which brought oil pricing up to $4.00 a gal. Just wandering why this group is still around and why anyone would listen to them. This forecasting by groups that are not in the know must be stopped . The damaged that is done from their speculations should be unlawful at least. When they chose to run their mouth and cause the American people hardships because of fake reports , they should be made to pay the money lost to each indivdual !!!

[Michael Snyder]

Aren't these the same "experts" who were gleefully predicting $210 a barrel oil last year?

[Steve]

Economic recovery? Not a chance in hell.
This will only force people to save every penny they have, no shopping malls, no new tv's, furniture, you name it.
The government knows exactly who is doing this, and who makes the money off of this, and yet do nothing, nothing at all as we are being scamed.

Hey bankers, stock brokers....I'm not spending a penny over what I need!!!

[Ramzilla]

Goldman-sacks-o-sh**, like Alan Greenspan, need to keep their mouths shut and the idiots in the media that print their spewings like it's the gospel should be ashamed of themselves for helping them. $70 oil is nothing more than speculative BS. Oil shoudn't bounce up and down with the stock market...only in this environment. I paid $2.09 per gallon at the pump today and that's what I paid when oil was where it should be...below $45. Does that make sense to anyone?