Back when Goldman oil bull Arjun Murti said oil was going to $150, a slew of bloviators called him reckless, irresponsible, and, gasp, wrong. Oil hit $147 in mid-July and while that may not quite be $150, it’s close enough.
So now that oil is hovering around $115/barrel amid fears of global economic collapse, is the bank ready to trim its forecast? Nope.
Goldman isn’t worried about a strengthening greenback either: they’re focused on fundamentals. They expect declining trend oil supply growth and emerging market demand to continue to drive rising oil prices. Period:
Although the recent correlation in dollar and oil prices is clear, it is important to emphasise that each of these assets are driven by multiple, varying factors … Put differently, there is more to oil than the U.S. dollar and vice versa.
[There is] very little correlation between oil prices and the U.S. dollar over the longer term.
Goldman reiterates their year end oil price forecast of $149
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