Business | Oil & Gas
Goldman slashes oil price forecast as demand slows
Arjun Murti, the Goldman Sachs Group Inc. analyst who predicted a ""super spike'' in oil prices in March 2005, slashed his forecast for West Texas Intermediate crude to an average $110 a barrel in 2009 as oil demand slows.
- Bloomberg
- Published: 00:04 September 22, 2008
London: Arjun Murti, the Goldman Sachs Group Inc. analyst who predicted a ""super spike'' in oil prices in March 2005, slashed his forecast for West Texas Intermediate crude to an average $110 a barrel in 2009 as oil demand slows.
Murti and other Goldman equity energy analysts cut their forecast for US benchmark WTI from a previous estimate of $140 a barrel, according to a research note dated September 17. A team of Goldman commodity research analysts led by Jeffrey Currie in London last week reduced their 2009 forecast to $123 a barrel from $148.
"During a period of uncertain global economic and oil demand growth, we may be in for a 6-12 month period where the need for upward price pressure is reduced in the absence of material supply disruptions," the report said.
Oil has fallen more than 30 per cent in New York since reaching a record $147.27 on July 11 as credit market losses in the US threaten the global economy, eroding demand. Should the global economy fall into recession, oil could drop as low as $75, according to the report.
New York-based Murti is a managing director at Goldman and head of Americas equity energy research. He first wrote of a "super spike" in March 2005, when he said oil prices could range between $50 and $105 a barrel in 2009. In May this year, he said prices may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with demand.
Crude futures for October delivery gained $2.60, or 2.7 per cent, to trade at $100.48 a barrel in early trade on the New York Mercantile Exchange on Friday.
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