Goldman Sachs comments on oil. Oil rose for the first time in seven days after Goldman Sachs Group Inc. said the balance between supply and demand of crude is tightening and China’s government pledged to boost the nation’s economy.
Futures gained as much as 0.6 percent after falling to the lowest close in almost seven months on May 18. The extent of oil’s decline was unwarranted, Goldman said in a report e-mailed today. China, the world’s second-biggest crude user, will focus more on bolstering economic growth, the official Xinhua News Agency reported yesterday, citing Premier Wen Jiabao. Prices slid earlier after Saudi Arabia’s output in March climbed to the second-highest level in at least 31 years before a European Union embargo on Iran that starts in July.
“With Saudi ramping up production to meet the need for oil once sanctions against Iran come into full effect, the oil market was pushed into surplus this year,” David Greely, head of energy research at Goldman Sachs in New York, said in the report. “However, as Iranian supplies are increasingly shut out from the market as the sanctions take effect, that surplus is disappearing.”