The Donald said yesterday that “you can’t have a successful nation with $125 oil.” So what happens at $127? Presumably nothing good.
The possibility of even stronger Chinese demand for diesel in the wake of the devestating earthquake was the first catalyst. Then a new Goldman Sachs report increasing second half price estimates from $107 to $141 also startled the market. Bloomberg:
“We can blame Goldman again,” said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. “In March 2005 they predicted that prices would rise dramatically, and they did. Prices jumped to the $125 level after another Goldman report less than two weeks ago. At this point nobody wants to bet against Goldman.”