Sorry, I think we’re still getting email alerts for these articles. So, for now, after this note, let’s return to the backup site for more reading. Thanks! – Ilene
We all know about this already, but here’s Barry’s Ritholtz’s comment on the oil forecast.
WTF Headline of the Day? GS Says Oil ‘Likely’ to Reach $150-$200
Excerpt: "Today’s WTF headline isn’t a criticism of the financial media so much as a disturbing forecast:
Goldman’s Murti Says Oil `Likely’ to Reach $150-$200
Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand from developing nations, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.New York-based Murti first wrote of a "super spike” in March 2005, when he said oil prices could range between $50 and $105 a barrel through 2009. The price of crude traded in New York averaged $56.71 in 2005, $66.23 in 2006 and $72.36 in 2007. Oil rose to an intraday record $120.93 today on speculation demand will rise during the peak U.S. summer driving season.
Before you blow the guy off as an energy extremist, his $105 target 3 years ago was widely derided ("another Henry Blodget wannabe")…."
And an excerpt from Paul Kedrosky’s article on the Infectious Greed blog:
The Oil Bubble, Self-Organized Criticality, etc.
"My earlier post about the possible oil bubble seems to have touched a nerve, so here is more. The good people at Factset have out a fascinating new report on the same subject — how energy markets are becoming awfully bubblish — and it’s worth a read in its entirety.
Here is one quick figure from the report showing how profits are growing so quickly that oil companies can’t keep up by raising prices. It creates an interesting box for energy companies and is one sign of a crack in the market."
"To be clear, I see no reason why oil prices tumble materially tomorrow. Matter of fact, I’m usually two years too early on these calls…"
Another perspective on GS’s call on oil prices, courtesy of Trader Mark.
Goldman Sachs: Gasoline Not Driving Oil Price – Oil Going to $150-$200
Normally, I don’t care for predictions but considering this was the fellow who in 2005 said their could be a "super spike" in crude, let’s see what he has to say (I am on record as saying a "World of Shortages" theme combined with Western governments flooding the world with fiat paper can only combine to ultimately create higher prices). These are the first people (along with Cramer – have to give him kudos) who finally are realizing that the world does not revolve around the United States of Subprime; a position I’ve been advocating for a long while. The quicker we move away from our country-centric views, the better.
For more, check out Trader Mark’s Fund My Mutual Fund.
