Goldman Sachs forecasts WTI oil to climb to $85-$95/bbl in 2010

22 February 2010 17:28  [Source: ICIS news]

LONDON (ICIS news)--Goldman Sachs on Monday has forecast that WTI oil prices will climb to $85-$95/bbl this year as global economic growth accelerates, while Commerzbank warned of an imminent price correction.

The positive year-on-year growth in US industrial production for the first time since March 2008 and the expansion of Japan’s economy at an annual rate 4.6% in the fourth quarter of 2009, which was well above expectations, contributed to the recent rallies, the US investment bank said in a report.

A disruption in North Sea crude oil production, reduced Venezuelan fuel oil exports due to a power generation crisis and an extended refinery strike in France fuelled bullish sentiment for crude, the bank added. 

Goldman Sachs expected oil prices to rise to $85-$95/bbl in 2010, up from the $70-$80/bbl range since October last year.

Commerzbank, however, warned that a price correction was imminent.

The German bank said the rally since mid-February was mainly due to speculative investors’ activities and was therefore not sustainable. Given that fundamentals remained weak, Commerzbank said, oil prices were unlikely to exceed the mark of $80/bbl for long.

The bank also cautioned that China’s oil imports will slow down in the coming months due to ample stockpiles.

Oil prices were little changed on Monday. Brent crude on London’s ICE futures exchange was trading at $78.17/bbl, which was a gain of $0.02 against the previous settlement. By 17:10 GMT, April Brent crude had hit a high of $78.94/bbl.

At the same time, March NYMEX light sweet crude futures were trading around $79.77/bbl, having hit a high of $80.51/bbl, a gain of $0.70/bbl from the previous close.

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By: Vinicy Chan



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