Goldman’s oil guru sees crude falling to $75, but after 20 yrs

Goldman’s oil guru sees crude falling to $75, but after 20 yrs
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First Published: Sun, Jun 15 2008. 02 46 PM IST
Updated: Sun, Jun 15 2008. 02 46 PM IST
PTI
New York: Crude oil price may fall by nearly half to below $75 a barrel, but after 20 years, feels Goldman Sachs analyst Arjun N Murti who shot to fame as ‘oil guru´ for rightly predicting a sharp spike much in advance.
Incidentally, it was Murti, an Indian-origin energy analyst at the global investment banking giant, who predicted last month that crude prices were heading towards a level of $150-200 a barrel in the next six months to two years.
Crude prices, that settled at $134.80 on 13 June at the New York Mercantile Exchange (NYMEX), had recently touched 140-dollar mark and have been a key concern amid rising inflationary pressures across the world, including India.
While re-asserting his view that crude oil was likely to remain strong in the near future, Murti said in an interview with the American stock market weekly Barron’s that Goldman Sachs’ long-term forecast for 20 years was that the price could fall back to $75 a barrel.
“We have always assumed that, at some point, you get a sustained drop in demand. Our long-term oil forecast looking out 20 years is to fall back to %75 a barrel, or some lower number,” Barron’s quoted Murti as saying.
In a Goldman Sachs research note last month, Murti had written that the possibility of oil price rising to $150-200 per barrel level was increasingly likely over the next 6-24 month.
According to Barron’s, it was a “controversial call” when crude was around $40 a barrel in 2004 and Murti predicted in a report “a potentially large upward spike in crude oil, natural gas and refining margins at some point this decade.” But the forecast was “right on the money” as four years later, crude is trading around 139, it said.
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First Published: Sun, Jun 15 2008. 02 46 PM IST