Tuesday, May 6, 2008

A report out this morning from Goldman Sachs states that their analysts think oil will "likely" trade between $150 and $200 in the next 6 to 24 months.

My favorite quote from the report:

``Unfortunately, we do not think the energy crisis will be solved by finding and punishing the big bad speculator.''

(Well, common sense won't do a bit of good.  Someone is going to have to hang for higher oil prices, and it sure isn't going to be one of our "Leaders", so I expect to see a couple of speculators arrested and charged before long...)

KUDOS!!!! to Goldman.  Unlike the other "Wirehouse" or big retail firms, Goldman's clients are the most well informed (and wealthiest) folks on the planet (G-d, its good to be King!), so Goldman's business is not predicated on misinforming their client base, as a UBS, or Merril, or Smith Barney is (not that they wouldn't if they could, it just  wouldn't work for them).  Publishing "Wishcasting" (as opposed to well reasoned "Forecasting"), like the retail firms do will not work for someone like Goldman Sachs, and it won't be long before the other firms roll over dead and follow suit.  At that time Oil will be close to a "sell" and if you follow the advice of the retail firms you will get your bottom reddened in front of the class.

Yours for a better world,

Mentatt (at) yahoo (d0t) com


Anonymous said...

The funny thing about his earlier $105 a barrel forecast is that he got a lot of negative publicity from the media. It was not a popular forecast but no one took it very seriously. Now he comes out with a BOMBSHELL of a forecast of $200 a barrel and no ribbing, no rebuttals nothing at all. I have not found anything negative. Instead everyone is scared but they agree with him it seems.

Check this out as an example:

The American mindset has changed. It has changed overnight and that is all there is to it. I suspect widely spread gasoline shortages in US by end of year.

Hold on to your horses,
Chuck H.

Anonymous said...


doesn't fit. How do you do that tinyurl thing?
Chuck H.

Greg T. Jeffers said...

As long as the government allows the price to move up without interference, I doubt we will have shortages per se. Price can easily bring supply and demand into equilibrium - we may not LIKE it, not one little bit, but nobody asked us what want or like.

Anonymous said...

Greg is correct, we will have a choice between extremely expensive ($8) gas that is available (market solution), or less expensive gas that is either rationed or available intermittently (shortages).