RE:Goldman thinks $100 oil possible, even $110Soooooo.....let's take a realistic look at this speculation.
Is it possible for oil to get to $110?
Sure, anything is possible, what about $200...$300?
The fact of the matter is the following -
1.....it is possible for oil prices to spike for a short period of time due to slowing production or the lag between demand the ability of producers to produce more oil quickly due to infrastructure constraints, drilling and completion time etc
2....$110 oil will bring on more inflation and with it reduced demand for oil which in turn will lower the price of oil
3....over the longer run the price of oil will reflect the marginal cost of production including social expenditure costs for OPEC countries is much lower than $110 a barrel. So if the price stays above the marginal cost there will an incentive for producers to increase production which in turn will drive down the price per barrel.
What I said in Point 3 is Economics 101 and Goldman and other firms like them know this all too well and such statements are just another example of them trying to manipulate the market to their advantage and hoping that the general public hasn't taken Economics 101. Rest assured that they make such statements to generate stock action on oil companies so they make money from the commissions and are at the same selling their stake to these fish to line their pockets.
If however, there some supply/demand imbalances at some point in the future which for a short period of time result in a spike in oil prices, my best advice is to start pounding on your sell buttons and take your profits and don't get sucked into dreaming about even higher oil prices which the pundits will tell you is going to happen....cause it ain't gonna happen!!