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Goldman Sachs (GS) And $100 Oil

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By Douglas A. McIntyre Published
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Goldman Sachs (GS) had forecast that oil might hit $100 in 2009. Now the bank is saying that number could be reached this year. According to a report by Bloomberg, a decline in inventory and OPEC’s refusal to raise output could drive crude North.

Bloomberg writes that Goldman’s case is simple: "New disruptions of Nigerian or Iraqi supplies, or any military strike against Iran, might trigger the rise."

But, not so fast. OPEC is suffering currency exchange problems. The falling dollar is eroding OPEC’s profits on oil. The cartels purchasing power has dropped by a third and that means that the value of a barrel of oil has stayed around $43 for OPEC, the same as it was last year.

So, the oil producing countries have two options. Keep oil tight, and move the price up. This could increase their purchasing power, if the dollar holds steady. Or, they could increase supply and hope to make up some of their income on volume.

It makes the oil price even more of a crap shoot.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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