Crude Oil to reach $130 according to Goldman Sachs
A report from Goldman Sachs has announced today that the company’s analysts predict a strong increase in Brent crude oil futures over the next twelve months. The forecast comes at uncertain times in the economy of both the U.S. and the rest of the world, yet Goldman Sachs analysts seem firm in their expectation of Brent crude oil to reach the $130 a barrel mark by next year.
The prolific investment bank’s commodities analysts stated that though the growth in demand in developed nations will likely remain tepid due to their economic woes, the demand from emerging nations will more than make up for it.
The collection of emerging nations informally branded as BRICS is expected to make up the difference. The group consists of Russia, Brazil, China, South Africa and India. China alone is predicted to show a 9.2% growth over the next twelve months.
The Goldman Sachs people continued to state that the decrease in crude oil exploration from non-OPEC nations is also contributing to the prices of crude oil rising.
Aside from the oil commodity, the investment bank also has expectations of copper’s standing improving. Last year, China was responsible for over 39% of the demand and use of the metal across the globe. Copper’s production rates have been on a perpetual upswing, suggesting that somewhere around 2013, the metal commodity will likely peak before settling into a more stable niche.
Representatives from Asia Investment Research have previously stated that though China may be slightly affected by the economic downturn in terms of its demand for crude oil and copper, the nation’s ever-rising need of steel and cement will not see a decrease.
They added that if the second recession is avoided, the commodities will obviously prosper as well.
At this point, gold, crude oil, copper and rare earths represent commodities that are in fairly short supply, whereas coal, zinc and iron ore’s supplies are rising.
Yet the likeliness of the second recession will evidently affect all of these commodities, and the liquidity issues stemming from the recession could match the ones the world saw at the height of the economic downturn in 2008.