KUALA LUMPUR (Reuters) - Oil prices are likely to hit $150 a barrel this summer season, the global head of commodities research at Goldman Sachs said on Monday, as tighter supplies outweigh weakening demand.
“I would suggest that the likelihood of that happening sooner has increased tremendously ... sometime in summer,” Jeffrey Currie told an oil and gas conference in the Malaysian capital, referring to oil at $150 a barrel.
Goldman Sachs, the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago — a once unthinkable level — said last month oil could shoot up to $200 within the next two years as part of a “super spike.”
Forecasts that oil could head towards $150 and above have multiplied over the past month as prices broke through several records, the latest being last Friday, when oil soared more than $11 a barrel on Friday, its biggest one-day gain ever.
Oil hit an all-time high of $139.12 on Friday on the back of a weak U.S. dollar and mounting tensions between Israel and Iran.
Goldman Sachs forecast almost a month ago that U.S. crude would average $141 a barrel in the second half of 2008, up from a previous projection of $107, due to tight supplies.
“Demand for oil is weak but supplies are even weaker,” Jeffrey Currie told the conference, citing supply disruptions in Nigeria and struggling output rise in Russia.
Investment bank Morgan Stanley, another big Wall Street energy player, said on Friday that crude may reach $150 by July 4 due to robust Asian demand and falling inventories.
Reporting by Chua Baizhen, writing by Maryelle Demongeot; Editing by Ben Tan