oil prices

oil prices

This Week in Heating Oil: Two Visions of 2010 Oil Prices

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This week brought fresh predictions for 2010 oil prices from two prominent sources: the investment bank Goldman Sachs and the Centre for Global Energy Studies in the UK. Goldman, still confident that a robust economic recovery will take place in the global economy this year, increased its crude oil price prediction to $85-$95 a barrel by the end of 2010. Its prediction is based in part on expectations that the Chinese economy will lead the world out of the downturn and provide a massive boost to oil demand over the next few months. The Centre for Global Energy Studies agrees that the global economy will see some recovery this year, but that it would be modest and lead to only slight increases in oil demand, and therefore predicted that the price of crude would remain below the $80-$90 range. On the subject of Chinas role in a recovering economy and resurgence in oil demand, the Centre made the point that a Chinese recovery would first require economic recovery in OECD nations that are the biggest importers of Chinese consumer goods. Because the strength and speed of recovery in wealthy nations is in doubt, the Centre reasons, gradual recovery of the world economy and limited, incremental increases in oil prices is a more likely scenario.