Oil prices could spike to 2008 levels: Goldman Sachs
New York: Arjun Murti, the Goldman Sachs equity analyst who predicted oil prices would spike to $150-$200 a barrel three years ago said on Friday the market is showing ‘stark similarities’ to the start of the 2007-2008 bull run.
“Disappointing supply, decent demand, huge draws in inventories and limited spare capacity are all common factors. We are currently in the tightest physical market we have experienced since the end of 2007/beginning of 2008.”
... Murti said that inventories of oil in developed countries have fallen sharply in 2011, influenced by supply outages in Libya and buoyant demand. “The latest inventory data from Europe, the U.S. and Japan suggests total inventories are now 31 million barrels below their five-year seasonal average, and in absolute terms crude inventories are back at their 2006 levels,” Murti said, adding stocks would be even lower if it were not for the International Energy Agency’s emergency fuel [SPR] release over the summer.
“This reflects a global market in deficit despite Saudi producing the highest amount of crude since the 1980s and shows stark similarities to the 2007 bull market that led to demand rationing prices.”