Monday, November 9, 2009

Goldman Keeps $85 Oil Target on China's 'Robust' Deisel Demand; Forcasts $110 Oil in 2010

Here is the article – I have amended the title, and am not including the entire article:

Goldman Keeps $85 Oil Target on China’s ‘Robust’ Diesel Demand; Forecasts $110 Oil in 2010

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By Yee Kai Pin

Oct. 26 (Bloomberg) -- Goldman Sachs Group Inc. maintained its forecast for crude oil to reach $85 a barrel by the end of this year on “robust” demand for diesel in China, the world’s second-largest energy consumer.

“Chinese oil demand is leading the way and U.S. oil demand is lagging behind,” Goldman analysts led by David Greely said in a report dated Oct. 23 and made public today. “We are likely to see a recovery in which strong emerging-market oil demand puts upward pressure on crude oil prices.”

China posted a 600,000 barrel-a-day increase in refined- product demand in the third quarter as its economy grew 8.9 percent, said analysts at the bank. While Asia’s second-biggest economy became a net exporter of diesel because of refining capacity expansions, domestic demand for the fuel reached “new highs” in August, the Goldman analysts wrote.

Crude oil in New York has gained 79 percent this year, reaching a one-year high of $82 a barrel Oct. 21 as traders bet on improved prospects for a global economic recovery. Oil for December delivery on the New York Mercantile Exchange traded near $80 a barrel today.

Goldman, which predicts oil will average $82.50 a barrel in the fourth quarter of this year and $110 a barrel in 2010, said fundamentals are headed in the “right direction” even as demand in the U.S., the largest consumer, remained slow.

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