Goldman Sachs predicted $150 oil two years ago now it says $70 oil coming, will they be right this time around?

Posted on 28 October 2014 with 1 comment from readers

Goldman Sachs has a less than stellar forecasting record on oil. Two years ago the US investment house said crude would surge to $150 a barrel, now it has oil plunging to $70 next year. What has changed in that period? Is it all down to US shale oil output and slowing Chinese demand?

Prices need not necessarily continue the upward slope, because market prices are driven by demand, supply, and consumption. Even the value of money depends on the delicate balance between these elements. You can blow a balloon, but before what size? Only until it can hold the air you are blowing into and once the delicate balloon skin gets past the maximum tension it can withstand, it bursts. Our stock market and the assets also have the same trait. Whenever there is a factor standing out in the crowd and not matching with the trend, it is not immediately accepted.

When the current trend is high oil price, a drop in the same definitely raises concern. When the trading market is giving a tough time to the traders with meager profits, a new trading program called Bitcoin Loophole that claims to earn 99% payouts comes under the scanner. Efforts have to be reiterated to convince the customers that Bitcoin Loophole is not a scam and is a real rope to catch on.

OPEC nations thrive with their oil resources but suffer from political instability and this reflects in their changing oil trade policies. Advances in mining, satellite and remote technologies are bringing out new oil reserves, while the existing ones are rapidly exhausting. The global warming, political clashes, frequent recessions and messy environment are provocating the citizens and the authorities to try greener energy sources.

Liquid gold has also been the cause of many bloody wars and is still a subject of gaining power. The emerging economies have slowed down a bit in their revolutionary economic growth and are in search for options to become self-sufficient. The recent developments are hinting towards a role reversal.

Oil prices are already down 30 per cent. Is this a case of closing the door after the horse has bolted?

CNBC Jim Cramer has his own thoughts on this inconsistent record and whether it will be wrong again now…


Video link click here!

Posted on 28 October 2014Categories: Hedge Funds, Investment Gurus, Oil & Gas, Sovereign Wealth Funds, US Stocks, Video Channel