Goldman: Crude To Stay High Long Term

[Strelnikov_]

And these guys get paid 6-figure salarys to come up with predictions like this.

Goldman: Crude To Stay High Long Term
August 18, 2005
http://money.cnn.com/2005/08/18/markets/goldman.reut/index.htm

Goldman Sachs raised its U.S. oil price forecast for the rest of this year Thursday by $13.50 to $67 a barrel as demand outstrips supply and the industry sits on billions of dollars it could invest in finding new oil.

The investment bank, which dominates the commodities markets, also increased its average U.S. price forecast for 2006 by $13 to $68 a barrel and said it expected longer-term oil contracts to hold firm at around $60 a barrel, reflecting the increased financial risk of getting extra oil out of the ground.

Even with prices at close to record levels, it said oil companies were sitting on huge cash piles rather than pouring money into new projects because of uncertainty over their profitability.

"Even at current high price levels, re-investment rates appear to be falling not rising, pushing industry cash reserves near $500 billion," Goldman Sachs Commodity Research said in a note.

. . .

[wli]

1. anyone at DU could have come up with this n/t

[baby_bear]

2. I could not figure out that headline

until I read the snips from the article.

I had never thought that being high for a long period of time was considered crude. Stupid, maybe but not crude.

:smoke:

I have been working way too hard.

b_b

[IA_Seth]

9. Lol, I am glad I am not the only one...

[meganmonkey]

10. LMFAO

:spray: :rofl:

Oh, man...and I was going to try to wait until 4:20 to post this reply but I figured I'd forget.

And for me, 4:20 is more like 5:30 today ;)

[tedzbear]

3. Well, now that our banks are in the oil trading biz no wonder.

Our deregulated banks (primarily JPMorganChase) have invested millions in oil trading & logistics, and they are reaping billions in profits.

So if you want to invest in oil stocks, forget Halliburton or ExxonMobil, buy shares in JPMorganChase.

[PurityOfEssence]

4. Can you say "forEVER"? I knew that you could.

With age, I keep revising my estimates of the general populace's sense downward, and I'm still ridiculously optimistic.

Oil is finite. We've sucked out most of the "easy" stuff, and now we're going to have to work harder to get the rest. Little of it is in "friendly" hands. Not only that, but demand has increased sharply.

With all of these factors, people still seem to think that it's an endless font of goodies and somehow it's just people being difficult or dishonest that drives the price higher. Couple this with the habitual lying of corporations, and it's easy to see that there's less of the stuff than we think and more of a demand than we'd like to admit.

World trade is a very delicate thing, and little upsets here and there can have huge repercussions. As we blunder around the globe stomping those who annoy us, it only takes little glitches here and there to radically disrupt everything.

Even small increases in oil (or worse, disruptions in deliveries) wreak havoc. The idiots who puff that it's only a "Six dollar a week increase" fail or refuse to see that the increases happen at each level of production: it's more expensive to produce the product, more expensive to ship it and more expensive to sell it.

The world's view of sharply increasing oil prices is like a belief in god: we can't be wrong; we just can't be. Regardless of obvious math--hell, not even math, mere ARITHMETIC--we know the answer, and that answer is that things will be more or less like they always were. Tripling the cost of the basic foodstuff of industry can't change anything, it just can't.

It's just maddening.

[Mercury_Rising]

7. N/T

Please ignore. I needed to test signature line. Sorry.

[TomClash]

5. Six Figures? At Goldman? LOL!

The secretaries get that!

[krkaufman]

6. And I've revised my previous age estimate upward one year.

Not terribly bold of GoldfilledSacks to predict pricing that's already been surpassed. I just hope they're investing their money where their mouth is, and take a dark-black, sticky bath.

[tom_paine]

8. Consdiering the Bush Family now essentially controls the Oil Market

this is a given. A done deal.

They now operate with the impunity of Hitler. They just shipped a 72 ton brick of COLD HARD CASH to their cronies in Iraq, which has to go down in history as the biggest Mafia "Brown Envelope" payoff in human history.

It is what they do, as sure as a tapeworm HAS to attach itself to your intestine or it dies.

The difference is I think the Imperial Family of Amerika doesn;t even understand what the simple brainless tapeworm does...that if you kill the host on which you parasitize, you yourself pass out of existence.

Besides, they are more like monkeys pressing the buttons for the limitless cocaine than they are taqpeworms.

Said monkeys will keep pressing that cocaine button to the exclusion of all else, including readily accessible food and water, until they die of starvation.

Of course, in Empires, it's you and me who dies, not the Imperial Monkeys.

[Orsino]

11. Orsino: Water to Remain Wet Long Term n/t