Post by
TheRock07 on May 24, 2011 7:07pm
Goldman Forecasts $130 oil in 2011
Goldman, Morgan Stanley Bullish on Commodities Favoring Oil
May 24, 2011, 5:18 PM EDT
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e-mail this story print this story 0diggsdiggadd to Business Exchange By Chanyaporn Chanjaroen
(Adds Goldman comment in seventh and 10th paragraphs.)
May 24 (Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley increased their forecasts for crude-oil prices by more than 20 percent, signaling a bullish outlook for commodities.
Goldman, which correctly advised investors to sell oil and copper last month before a price slump, boosted its 12-month prediction for Brent crude to $130 a barrel from $107, analysts led by Jeffrey Currie said today in a report. Morgan Stanley raised its estimate by 20 percent to an average $120 this year and by 24 percent to $130 in 2012.
While Goldman and Morgan Stanley join JPMorgan Chase & Co. in saying price declines may present a buying opportunity, interest-rate increases and the European debt crisis have raised concerns that global growth may slow. China, the world’s biggest consumer of everything from energy to copper and soybeans, has increased borrowing costs four times since mid-October to cool the fastest inflation since 2008.
“Economic growth will likely be sufficient to tighten key supply-constrained markets in the second half, leading to higher prices from current levels,” the Goldman analysts said. They also advised buying copper and zinc.
Brent advanced as much as 2.3 percent to $112.65 on ICE Futures Europe Exchange. Copper for delivery in three months climbed 0.8 percent to settle at $8,861 a metric ton on the London Metal Exchange.
Commodities Decline
The Standard & Poor’s GSCI index of 24 raw materials dropped about 10 percent through yesterday since New York-based Goldman told investors on April 11 to sell a basket of commodities including oil, copper and cotton. The gauge rose 1.2 percent today.
“We are substantially more confident when the market is focused on demand growth relative to forward supply constraints as opposed to near-term transient supply shocks,” Currie said today in a telephone interview in London