Oct 19 2012 |
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Goldman slashes Brent oil price forecast to $ 110
Friday 19 October 2012Wall Street giant Goldman Sachs, one of the biggest banks in commodity trading, has called an end to the oil price super-cycle, reversing years of bullish recommendations, citing a rise in unconventional oil supplies in the US and Canada. Goldman has been highest predictor among major oil price forecasters but said "long-dated" or five-year forward Brent crude may be anchored at about $ 90 a barrel, Reuters reported. The bank also cut its 2013 Brent forecast to $ 110 a barrel from $ 130. Brent traded near $ 112 yesterday.
"Over the past three years long-dated Brent crude oil prices have shown signs of stabilizing around $ 90 per barrel. This suggests a return to the pricing regime that characterized the crude oil market in the 1990s," Goldman's analysts Jeffrey Currie and David Greely said in a note. "We expect that going forward long-dated oil prices will be anchored by the potential for substantial growth in crude oil supplies from US shale, Canadian oil sands, and the deepwater. Net, we see a return to a structurally stable, but cyclically tight market," they said.
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