Weekend Edition: Goldman Sachs Predicts a New High for Oil Prices by 2012

Last week WTI oil prices settled below the $100 mark after shedding 10% in a single day. Goldman Sachs which predicted this week’s correction in oil back in April has come out with a new prediction on Friday: Oil prices will surpass its recent highs in 2012 based on supplies tightening. Goldman Sachs’ analysts said in their research note:

“It is important to emphasize that even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year,”

“We continue to believe that the oil supply-demand fundamentals will tighten further over the course of this year, and likely reach critically tight levels by early next year should Libyan oil supplies remain off the market,”

Well GS is one of the most influential banks on Wall Street in the commodities business after all, so maybe they are right as they did a great job predicting Thursday’s crash. I am not going to worry about 2012 prices because all I care about right now is for oil prices to stabilize at around $90-$100 for the rest of the year in order to outperform the market with my stocks.  On the other hand, unless the Libyan crisis is resolved in the near future, I might not be getting my wish as the general trend for oil prices appear to be higher thanks to diminishing spare capacity and growing demand. How long before oil prices start climbing again?

Sometimes I get the impression Goldman Sachs is a puppet master with the ability to influence oil prices more than they should be able to…or they’re just really good at their job….

Economic roundup:

Another way to beat al Qaeda: Energy independence?

Bin Laden Killing Has Little Impact on Market

The Great Inflation of the 2010s

The Dark Side of the Jobs Report

PIMCO says Canada or Australia for AAA bonds

Weekly blog roundup:

Canada’s Conservatives Win 2011 Election and Harper Wins a Majority Government @Invest it Wisely

Communications, Materials & Techno Stocks: Dividend Sector Winner Q1 @Dividend Guy Blog

Dividend Yield: Bell Alliant (BA) @The Passive Income Earner

BBQ Chicken In The Springtime @101 Centavos

20 Quick Ways to Check a Company @Dividend Monk

Why become a DIY Investor? @My Own Advisor

5 Common Mistakes Investors Make@Boomer and Echo

Paying Expenses From Dividends@Money Reasons


Have a great Weekend!