Right, so it’s not exactly $200 a barrel but it is “a swift and violent rebound.”
Goldman’s Jeffrey Currie is quoted at a London commodities conference on Monday:
Jan. 19 (Bloomberg) — Goldman Sachs Group Inc. commodity analyst Jeffrey Currie said he expects a “swift and violent rebound” in energy prices in the second half of the year.
Oil prices may have reached their lowest point already, after falling to $32.40 in mid-December, and are expected to rise to $65 by the end of this year, the analyst said. There is scope for a “new bull market” in oil, Currie said.
World oil demand is likely to fall by about 1.6 million barrels a day this year, the Goldman analyst said today at a conference in London. That’s bigger than the reduction expected by the International Energy Agency, which last week forecast a decrease of about 500,000 barrels a day, or 0.6 percent, this year.
A recent tactic of using supertankers to store crude oil to take advantage of higher prices later this year is “difficult” to profit from and is “near the end of this process” anyway, the Goldman analyst said…
The contango is likely to flatten as supply cuts by OPEC and other producers take effect, reducing the availability of oil for immediate delivery, Currie said.
The Organization of Petroleum Exporting Countries started another round of supply cutbacks at the start of this month. The group’s compliance with its overall efforts to cut production will probably peak at 75 percent, or a reduction of about 3 million barrels a day out of an announced aim of 4.2 million barrels a day, Goldman Sachs said.
Of course, $65 a barrel in 2009 isn’t exactly a brave call for Goldman — Bloomberg consensus for ICE Brent is $68 a barrel for Q4 2009 (see below, right) and $70 a barrel for Nymex WTI. According to the Bloomberg data, there are also individual banks calling it higher than Currie — BNP Paribas for instance, sees WTI at a whopping $85 a barrel by the end of this year (below, left), with the same story in individual Brent forecasts. Click to enlarge the tables.
Related links:
Goldman considers all options – FT Alphaville
It’s official, Goldman capitulates on oil – FT Alphaville
Oil set for “swift and violent rebound” – OilVoice