Goldman: Speculators Driving Up Price of Oil

Wall Street critics have long blamed speculators for driving up the price of oil. Surprisingly, investment banking giant Goldman Sachs appears to agree. In fact, it has issued a warning that the price of oil has grown out of control due to excessive speculation. This has driven down the price of Brent crude oil for the past two days. David Sheppard from Reuters reports:

Goldman Sachs chief energy analyst David Greely said the recent run-up in prices, in which Brent rallied as much as 33 percent since the start of the year, looked overdone.

"While prices are back at levels of spring 2008, supply-demand fundamentals are significantly less tight," Greely said in an April 12 note emailed to clients.

"We believe that the market will experience a substantial correction toward our $105 a barrel near-term target for Brent crude oil in coming months," he stated.

On Monday prices peaked at $127 per barrel, but now they're already down to around to $120.63 at 2pm EST on Tuesday. Obviously, if Goldman is right, then prices still have much further to fall. To be sure, it would be great news for the economy if oil prices declined to more reasonable levels.

Read the full story at Reuters.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

Why Principals Matter

Nadia Lopez didn't think anybody cared about her middle school. Then Humans of New York told her story to the Internet—and everything changed.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A History of Contraception

In the 16th century, men used linen condoms laced shut with ribbons.

Video

'A Music That Has No End'

In Spain, a flamenco guitarist hustles to make a modest living.

Video

What Fifty Shades Left Out

A straightforward guide to BDSM

More in Business

Just In