With $100-a-barrel here for now, Goldman Sachs says $200 a barrel could be a near-term reality in the case of a “major disruption.” Goldman on March 7 also boosted by $10 the low end of its 2008-2012 projected range for crude to $60 a barrel—in the event that “normalized” trends return to the market. With the dollar’s fall continuing and financial markets squeezed by the credit crunch, commodities like oil have been drawing the increasing numbers of investors, and Wall Street firms have been eager to adjust forecasts. Goldman analysts Arjun Murti, Kevin Koh and Michele della Vigna said prices have advanced more quickly than Goldman had forecast back in 2005, when it predicted a range of $50 to $105 a barrel as part of its “super-spike” oil theory.
In the unrevised “super-spike” theory, the high end of the projected price band was a worst-case scenario predicated on a major disruption, while the low end was predicated on a possible US recession driving down demand. “In fact, oil prices have reached $100 a barrel without extraordinary turmoil, and the US currently appears to be in recession,” the analysts said. (MarketWatch, March 7)