Goldman Sachs is once again warning the world of a coming spike in oil prices that will remind everyone of 2008.
The current financial crisis is to blame. While we focus on fixing the banking sector, we've forgotten that there are fundamental problems with the commodites markets.
The spike from 2008 will return because there's been "decades" of poor investment decisions by oil producers.
When the economy kicks into gear around the world, supply shortages will become problematic, and the price of oil will spike. Says Goldman via Alphaville, "As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the markets balanced."
Apparently, Goldman Sachs didn't get the memo. We're going to chase the speculators out of the market, so none of this will be a problem.
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Source:
Jay Yarow. August 6th, 2009. 10:58AM. "The Business Insider - The Green Sheet" the businessinsider.com
Graph from "Goldman Sachs Nails The Oil Trade (GS)" by the Joe Weisenthal. August 3rd, 2009. 8:54AM. The Green Sheet.