Remember back in March when Goldman Sachs called for oil to hit $200 barrel? The forecast was based on the analysts’ so-called “super-spike” theory, and they specifically downplayed the risk of a global recession. To be fair, they weren’t the only ones who failed to anticipate the severity of the economic downturn.
Anyway, so much for oil $200. Today the firm is out with a new report, a mea culpa of sorts, suggesting that $50 oil could be in the offing.
The National (Abu Dhabi): “We clearly underestimated the depth and duration of the global financial crisis and its implications (for) economic growth and commodity demand,” a team of Goldman commodity analysts led by Jeffrey Currie and Giovanni Serio, wrote today in a research report. “Should the financial and evolving economic crisis cut deeper into (oil) demand, the market could fall as low as $50 a barrel.”The analysts predicted that $50 oil could become a reality as early as December. It is currently trading at $81 a barrel.
One thing we’re wondering is what happened to the authors of the original report? The oil $200 call was led by Arjun Murti, along with Kevin Koh and Michele della Vigna. Not it’s a couple of new names. Any ideas what’s going on?
Of course, oil is actually up today, on a glimmer of hope for the global economy.
Don’t miss the earlier Goldman calls: