SINGAPORE/LONDON (Reuters) - Goldman Sachs’ energy equity research team, which predicted a crude oil spike to $200 a barrel earlier this year, slashed on Friday its 2009 forecast to just $45 as demand deteriorates.
The team led by Arjun Murti, who made waves in 2005 by calling crude’s ascent to $100, also said prices would bottom out early next year and that a shift from “demand destruction” to “supply destruction” would ultimately revive oil’s rally.
In a separate report, Goldman’s commodities research team also cut its 2009 forecast to an average $45 and predicted world oil demand would fall by 1.7 million barrels per day (bpd) and help drive oil prices down to $30 a barrel in the first quarter.
“We expect that an additional 2 million barrels per day (bpd) of OPEC supply cuts will be required in 2009, along with a 600,000 bpd reduction in Non-OPEC production, in order to rebalance the market,” the team led by Jeffrey Currie wrote.
But both groups saw prices recovering in the near term.
Murti’s team predicted a return to positive demand growth and shrinking non-OPEC supply would lift prices to $70 a barrel by 2010 and to $105 by 2012.
“We do not believe oil markets are on-track for a decade-plus period of weakness like seen in the 1980s and 1990s,” they wrote.
Oil has collapsed more than $100 from its July peak as the dawning of a global recession drives demand lower in major economies.
But analysts and officials are warning that a prolonged period of cheap prices could set the stage for another rally if new investment is halted.
U.S. oil prices fell more than $2 a barrel to below $46 on Friday after a bailout plan for struggling U.S. auto makers stalled this week’s tenuous recovery from a four-year low.
Reporting by Jonathan Leff and Jane Merriman; Editing by Clarence Fernandez/James Jukwey