Business | Oil & Gas
Oil near $82, Goldman cuts price forecasts
Oil rose above $82 a barrel on Monday after governments around the world acted to boost confidence in the global banking system, spurring a rally in European and Asian stock markets and commodities.
- Agencies
- Published: 18:41 October 13, 2008
London: Oil rose above $82 a barrel on Monday after governments around the world acted to boost confidence in the global banking system, spurring a rally in European and Asian stock markets and commodities.
But investment bank Goldman Sachs said the financial crisis had already done more damage than it expected to commodity demand and warned that a slide to $50 a barrel for oil could be possible.
US crude for November delivery was up $4.40 at $82.10 a barrel by 1:10 p.m. GMT (9 a.m. EDT). Prices had plunged on Friday to their lowest since September 10, 2007.
London Brent crude was up $4.00 at $78.09 a barrel.
"The announcements from over the weekend would have some positive effects on the markets, even though it's still in very early days at this stage to say if they would put an end to the financial crisis," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
Goldman Sachs, a longstanding commodity bull, turned a near-term bear on Monday after conceding that global financial turmoil would take a far bigger toll on demand. It warned that $50 oil was possible if the crisis deepened.
"We have underestimated the depth and duration of the global financial crisis and its implications on economic growth and commodity demand," its commodity markets research team said.
The bank cut its year-end US crude oil target to $70 a barrel, down from a previous forecast of $115 a barrel, and slashed its average 2009 forecast by a third to $86 a barrel.
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