Goldman Sachs Says Window `Closing Fast' for Oil Drop
By Will Kennedy and Grant Smith
April 23 (Bloomberg)
Goldman Sachs Group Inc., the most profitable Wall Street bank, said the window for a decline in oil this spring is `closing fast,' as prices rise to records and the summer period of peak gasoline demand approaches.
U.S. crude imports are likely to rise because of lower inventories and the strength of local oil prices relative to the rest of the world, Goldman analysts led by Giovanni Serio said in their Energy Weekly report.
``Looking into the second half of this year, given the fundamental tightness, we believe the risks are substantially skewed to the upside,'' the report said.
The bank said on April 10 that oil may not fall as far as it expected previously, predicting that prices may slip to $98.80 in the spring, above a previous ``floor'' of $90 a barrel.
Crude oil futures rose to a record $119.90 a barrel on the New York Mercantile Exchange yesterday.
Goldman maintained its expectations for the price of the front-month crude contract in three, six and 12-months at $102, $107.50 and $115 a barrel respectively. The bank's forecast for the average price in 2008 of $105 is the second-highest among 31 estimates compiled by Bloomberg.