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Substantially Higher by 2012

That’s what Goldman Sachs says. Due to the shrinkage in the global stockpile and the reduction in excess capacity production, oil prices will go UP! We are in for a rude surprise.

Global economic demand means more oil demand, which will reduce inventory. OPEC’s spare capacity will disappear as it tries to meet demand.

“Despite the recent rally, we believe that forward price levels offer good hedging opportunities,” Goldman analysts, led by Allison Nathan in New York, said in the report. “We continue to expect improving fundamentals will provide additional support to prices.”

Oil is up 7% this month (so far).

Just what Joe on the street needs – price support for oil.

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