Is This Good For RailPower or What!Goldman Sachs: Oil Markets In Early 'Super Spike' Period
03/31/2005
Dow Jones News Services
(Copyright © 2005 Dow Jones & Company, Inc.)
NEW YORK (Dow Jones)--Goldman Sachs believes the oil markets have entered the early stages of a "super spike" period, which analyst Arjun Murti defines as a band of oil prices that could be high enough to reduce energy consumption substantially and create a spare capacity cushion that could reduce energy prices return.
Murti increased his super spike range to $50 to $105 per barrel from $50 to $80 per barrel. He also increased his 2005 forecast for West Texas Intermediate oil to $50 per barrel from $41 and his 2006 estimate to $55 per barrel from $40.
Murti recommends adding to positions in the oil sector "at current prices, on a pullback, or even after rallies," and raised 2005 and 2006 earnings estimates across the board.
His top picks in the sector continue to be Exxon Mobil (XOM), Amerada Hess (AHC), Bill Barrett Corp. (BBG), Devon Energy (DVN), EnCana Corp. (ECA), Murphy Oil (MUR), Newfield Exploration (NFX), Pioneer Natural Resources (PXD), Premcor (PCO), Questar Corp. (STR) and Suncor Energy (SU).