Oil Prices Up After Prediction of Huge Rise
Oil prices shot upward after Goldman Sachs predicted that they will rise to $105 a barrel.
U.S. light crude increased 38 cents to $55.78 a barrel, and Brent crude jumped 61 cents to $54.90 a barrel.
“We believe oil prices have entered the early stages of a super-spike period,” said analyst Arjun Murti.
According to Guardian Unlimited article,
“The bounce in prices came after Goldman Sachs, one of the world’s biggest traders of energy futures, issued a report yesterday saying that markets had entered a period in which strong demand and tight supplies could cause a “super spike” in prices. According to the report, energy prices will only return to lower levels once they hit a level at which demand weakens and spare capacity is created.
Prices have climbed 28% this year amid signs that strong economic growth in China and the US will strain world supply, leading to heavy buying from speculative funds.
Price jumped 2.6% yesterday following the report, but they have also come under pressure amid growing concerns about falling petrol stocks in the US ahead of the peak summer demand, caused by holiday driving”.
Last month, crude oil reached a record high of 57.60 dollars per barrel.
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