A 10 percent colder-than-normal Fourth Quarter 2007 could push oil to over $93/bbl, says Goldman Sachs in its latest Energy Weekly report
A colder-than-normal winter could push oil prices to $90 per barrel, according to a report published Monday by Goldman Sachs. Market attention has recently been devoted to the potential impact of a US-centered economic slowdown on oil demand growth and, in turn, the potential negative impact on oil prices, but according to Goldman Sachs a bigger risk is weather.
“We continue to believe that a stronger-than-expected economic slowdown in the world economy poses a downside risk to our price forecast,” said Goldman Sachs, but stressing, “However, it is important to emphasize that winter weather represents a far more important risk factor that can substantially impact oil prices both to the upside as well as to downside.”
Specifically, Goldman Sachs said the difference between a cold and a warm winter could result in a more than $16/bbl swing in oil prices, $8/bbl above or below its current $85/bbl forecast for year end....MORE