Looking into the future, which is always a crapshoot, but big and small business always have to do it, Goldman Sachs has raised its estimate of average oil prices for the next five years from $45 (its previous estimate set earlier this year) to $60 a barrel for West Texas Intermediate Crude. Compare this to Barclay's Capital which forecasts that WTI will remain above $50, Merrill Lynch forecasts $45 and Deutsche Bank estimates $38-40. Thus saith Friday's Financial Times.
It also says that while cash reserves have been accumulating in the oil industry, the rate of reinvestment has not yet picked up. The cost of development projects has doubled and is now in the tens of billions. With that much money on the line, the future forecasts have to be fairly accurate. Where is Nicky Engel when you need him?
What do it mean?
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment