London - Arabstoday
Goldman Sachs forecast the price of Brent crude oil at $130 a barrel in 2013, saying crude oil prices will continue to rise in order to slow demand growth, even in a poor economic growth environment. Making public its 2013 forecast for the first time, the firm also predicted the price of US crude at $126 a barrel in 2013, saying the WTI-Brent spread was likely to narrow further as the Seaway pipeline\'s capacity rises to 400,000 barrels a day. Brent was trading at around $110 on Thursday, while US crude was at $100, down on concerns about demand growth after factory output growth slowed in China, the second-biggest oil consumer, and fears persisted that Europe\'s debt crisis could spread. The firm maintained its 2012 price forecast of $120 a barrel for Brent and $112.5 a barrel for WTI. According to Goldman, crude oil prices will have to move sharply higher in 2012 to respond to the tightness in physical markets, before moving lower to factor in the potential damage from the feared global economic recession. \"We continue to view the crude oil market as navigating between the currently tight physical oil markets and the threat that the European debt crisis could trigger a global economic recession in the near future, which would lead to a sharp drop in oil demand,\" analysts said in a note. However, Goldman analysts said oil demand may drop in 2013 if 2012 sees the outcome of either of the two scenarios - a price spike due to tight physical markets or a drop in prices due to an economic recession.