Goldman Sachs Predicts Crude Oil to Soon Surpass Recent Highs

Ouch! If Goldman is correct in their assessment, I predict another recession!

from CNBC:
Goldman Sachs, which in April predicted this week's major correction in oil prices, said on Friday oil could surpass recent highs by 2012 due to supply tightness.

The Wall Street bank, seen as one of the most influential in commodities business, said it did not rule out a further limited decline in oil prices [CLCV1  Loading...      ()] in the short term.

News of Goldman's [GS  Loading...      ()] mid-term outlook on Friday helped oil prices pare some earlier losses and move higher, though the unexpected jump in US payrolls for April also helped.

"It is important to emphasize that even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year," Goldman Sachs' analysts said in a research note.

"We continue to believe that the oil supply-demand fundamentals will tighten further over the course of this year, and likely reach critically tight levels by early next year should Libyan oil supplies remain off the market," it said.