In energy markets, crude oil prices extended their retreat after a sharp fall in Friday’s session. Nymex October West Texas Intermediate oil fell 83 cents at $69.46 a barrel while ICE October Brent lost 50 cents at $60.19.
Analysts at Goldman Sachs said increases in both Opec and non-Opec oil production would be limited and the global oil market would shift into a deficit, pushing petroleum inventories in developed markets lower and oil prices higher.
Goldman reiterated its forecast for oil prices to reach $85 a barrel by the end of the year and crude would reach $95 a barrel by the end of 2010 as spare Opec production capacity became exhausted, non-Opec production declines worsened even as demand strengthened further.
“Mounting evidence of positive momentum in the OECD economies on top of still robust growth in emerging markets suggest that the dawn of renewed economic expansion is breaking,” said commodity strategist at Goldman Sachs: “We expect that this higher demand against limited production growth will push key commodities, such as oil and copper, into deficit, lending substantial support to prices and returns.”