Oil price rallies; forecast is raised to $68 by next year
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Aug. 18, 2005, 11:01PM
"We do not believe that the oil market has yet fully convinced itself that more than $60 is sustainable in terms of growth, and until that occurs, any move much higher is likely to be rather fleeting," Paul Horsnell, head of energy research at Barclays Capital in London, wrote in a research note.
However, securities firm Goldman Sachs Group raised its oil forecast for next year to $68 a barrel and said crude will stay at about $60 for several years.
Goldman increased its projection for the average New York oil price in 2006 from $55 a barrel. The forecast for $60 oil for the "long term" was raised from $45 because companies aren't investing enough in new supply, according to the report Wednesday from the firm's commodity research analysts, including Steve Strongin in New York and Jeffrey Currie in London.
On Thursday, the September contract for light, sweet crude rose 2 cents to settle at $63.27 a barrel on the New York Mercantile Exchange.
On Wednesday, the contract slid $2.83 to settle at $63.25, amid selling from hedge funds and other speculators after the market's recent rally, which saw prices rise as high as $67.10 in intraday trading Friday.
Gasoline fell nearly 3 cents to settle at $1.8629 a gallon, while heating oil gained less than a cent to settle at $1.7905 a gallon. Natural gas delivery fell 46.3 cents to $8.928 per million British thermal units as lower temperatures signaled reduced cooling needs and demands on gas-fired power plants.
In London, October Brent crude slipped 16 cents to settle at $62.40 a barrel.
Analysts said the sharp drop in oil prices in U.S. trading hours Wednesday was a correction in a market many perceive as overbought.
Wednesday's U.S. midweek petroleum supply report showing a large decline in gasoline inventories sparked renewed concerns of supply shortages.
Aug. 18, 2005, 11:01PM
"We do not believe that the oil market has yet fully convinced itself that more than $60 is sustainable in terms of growth, and until that occurs, any move much higher is likely to be rather fleeting," Paul Horsnell, head of energy research at Barclays Capital in London, wrote in a research note.
However, securities firm Goldman Sachs Group raised its oil forecast for next year to $68 a barrel and said crude will stay at about $60 for several years.
Goldman increased its projection for the average New York oil price in 2006 from $55 a barrel. The forecast for $60 oil for the "long term" was raised from $45 because companies aren't investing enough in new supply, according to the report Wednesday from the firm's commodity research analysts, including Steve Strongin in New York and Jeffrey Currie in London.
On Thursday, the September contract for light, sweet crude rose 2 cents to settle at $63.27 a barrel on the New York Mercantile Exchange.
On Wednesday, the contract slid $2.83 to settle at $63.25, amid selling from hedge funds and other speculators after the market's recent rally, which saw prices rise as high as $67.10 in intraday trading Friday.
Gasoline fell nearly 3 cents to settle at $1.8629 a gallon, while heating oil gained less than a cent to settle at $1.7905 a gallon. Natural gas delivery fell 46.3 cents to $8.928 per million British thermal units as lower temperatures signaled reduced cooling needs and demands on gas-fired power plants.
In London, October Brent crude slipped 16 cents to settle at $62.40 a barrel.
Analysts said the sharp drop in oil prices in U.S. trading hours Wednesday was a correction in a market many perceive as overbought.
Wednesday's U.S. midweek petroleum supply report showing a large decline in gasoline inventories sparked renewed concerns of supply shortages.
posted by Marcel at 3:05 AM
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