"Goldman Comments On Oil, Sees It Going Back To Recent Highs..."

From ZeroHedge:

Goldman's David Greely, who for a long time was predicting and hoping for a crash in oil, only to see a margin-hike driven one in silver leading to a massive collapse in the commodity complex, is out commenting once again on his outlook on oil. Not surprisingly, the Goldman analyst's chief fear now is that a contracting economy (which Goldman's economists have largely failed to noticed so far) will lead to further commodity weakness. Yet, in typical Goldman fashion, the commodity pump machine has once again disclosed that in the long-term there is only one way for black gold to go: up.

From the just released report: "We continue to see fundamentals tightening over the course of this year, likely pushing prices back to recent highs by next year. It is nevertheless important to reiterate that while we saw recent prices as having risen above the levels consistent with underlying near-term supply-demand fundamentals, we continue to believe that the oil supply-demand fundamentals will tighten further over the course of this year, and likely reach critically tight levels by early next year should Libyan  oil supplies remain off the market. Consequently, it is important to emphasize that even as oil prices are pulling back from their recent highs,  we expect them to return to or surpass the recent highs by next year."
Note summary:

Brent crude oil prices plummeted yesterday (May 5), falling $10.39/bbl to $110.80/bbl as of the NYMEX close, extending the declines of the past three days (Exhibit 1). In our view, the sharp decline resulted from prices pushing ahead of fundamentals in recent weeks, leaving them vulnerable to a substantial correction (see GS Energy Weekly: Prices return to spring 2008 levels, but fundamentals not there yet, April 12, 2011). We believe that the catalysts for the sell-off yesterday were a string of disappointing economic data releases and the May 4 DOE statistics...MORE