Blushing and Gushing

Red faces all round at US investment bank Goldman Sachs where leading oil analyst Arjun Murti predicted this year that oil would rocket to $200 a barrel. And what’s happened? Crude has plummeted to below $50 a barrel. So he’s now cut – slashed might be a better word – his forecast from $200 to $45.

Murti was correct in predicting in 2005 that oil would rise to $100 a barrel – and he got rising prices right for the next three years. So what’s his bet for the future? He and his New York based energy gurus are suggesting $70 a barrel by 2010 and $105 by 2012.

The thirteen oil producing nations – Opec – are meeting this week in Algeria to try and push prices higher by cutting production. But with global demand falling the chances look slim. In the UK consumers are increasingly frustrated at the way oil prices have fallen so swiftly but have not been reflected in the price of domestic oil to householders.