Goldman Sachs warns of $200 a barrel oil
By | Jul 30, 2008
Many of us, like my dear old Dad, still think it’s just doomsaying enviros predicting that the rising price of oil is a long-term trend signalling a fundamental shift in our global economy, rather than a temporary blip. The fact that Goldman Sachs, a leading global investment banking firm is warning of the possibility of $200 a barrel oil makes me wish this were true…
“A year ago no one was talking about $200 oil, and now everyone in the markets is, for scary reasons. Oil prices climbed from $10 in 1999 to $95 last year without slowing the surging world economy, in large part because the markets believed the spike was at core driven by rising demand, particularly from and , which feeds growth. There was concern over supply, too, but nothing like the tumult prompted by the stranglehold OPEC imposed on the world in the 1970s, at least not until recent months. As the per-barrel price climbed over the last few months, with futures reaching $135 last week, the consensus began shifting to a new more gloomy view: that not only would long-term demand, led by China and India, continue to grow, but that the supply threats, including increasing conflict, falling investment, industry bottlenecks and downward estimates of big field reserves in major oil states—aren’t going away any time soon. Now many (though not all) serious people take $200 oil—and the prospect of another ’70s-style oil shock—seriously. Goldman Sachs warned that the $200 barrier could be hit within the next six to 24 months.”
More here: www.newsweek.com/id/139395
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