$200 OIL!
Lance on May 06 2008 at 8:07 am | Filed under: Asset Allocation, Commodities, Energy, oil
Goldman’s Murti Says Oil `Likely’ to Reach $150-$200
Do you remember when Murti was derided for making the call that oil was going to have a superspike? I do, and I was one of the skeptics, though only for a brief while.
Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand from developing nations, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.
New York-based Murti first wrote of a “super spike” in March 2005, when he said oil prices could range between $50 and $105 a barrel through 2009. The price of crude traded in New York averaged $56.71 in 2005, $66.23 in 2006 and $72.36 in 2007. Oil rose to an intraday record $120.93 today on speculation demand will rise during the peak U.S. summer driving season.
No prediction from me, but I can see reasonable arguments for oil going up or down significantly. Longer term though, barring some unforeseen technological breakthrough that can be rapidly deployed, energy costs will stay high. Owning some exposure to energy as a hedge makes sense in any case.
Hat Tip: Barry Ritholtz.
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