Oil rose above $90 on Wednesday after Goldman Sachs sharply raised its outlook for crude prices next year, offsetting concerns over a flagging U.S. economy.
U.S. light, sweet crude futures climbed 76 cents to $90.78 a barrel by 7:05 a.m., adding to gains of over $2 in the previous session. London Brent crude traded 96 cents higher at $90.95.
Goldman Sachs, the most active investment bank in energy markets, now expects U.S. crude to average $95 a barrel in 2008, up $10 from the previous projection.
It said a cyclically stronger market in the second half of next year could push the price to $105 by the end of 2008.
"Cost inflation and technological and political uncertainty continue to increase the price required to motivate capacity investment, which has been reflected in a recent large rise in long-dated prices," the bank said....MORE
