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Goldman Advises Clients To Sell Brent Down To $105 (As Goldman "Client Facing" Team Is Better Buyer?)
Yesterday Goldman launched the first salvo in the crude correction trade, telling clients to take premature profits on its CCCP (crude among others) basket as we reported previously. Today, Goldman sell-side energy analyst, once again completely unconflicted and ignorant of what is happening across the Chinese wall where all those former prop traders and now better known as "client facing associates" buy on behalf of Goldman's multi-billion balance sheet, has released his latest hit piece on oil. "We expect the oil market will experience a substantial pullback toward our $105/bbl near-term Brent crude oil price target." And for those wondering, when is the last time Goldman ever dropped their oil price forecast? Well, usually a month or so before the firm hikes it to $150 (see 2008).
From David Greely
While prices are back at levels of spring 2008, supply-demand fundamentals are significantly less tight
The unfolding events in North Africa and the Middle East have pushed up Brent crude oil from $100/bbl in mid-February to over $125/bbl last Friday. These high prices levels invite comparison to the spring of 2008, when crude oil prices first breached these levels in May before peaking at over $145/bbl by early July. We believe that there are fundamental differences between now and the spring of 2008: Both inventories and spare capacity are much higher now and net speculative positions are four times as high as in June 2008.
We expect the oil market will experience a substantial pullback toward our $105/bbl near-term Brent crude oil price target
Consequently, we continue to believe that - even with the loss of Libyan production - the oil market has adequate inventory and OPEC spare production capacity to avoid the degree of physical tightness experienced in 2008 well into next year. Although the contagion risk in the Middle East and North Africa (MENA) remains elevated, and the oil market’s ability to weather the loss of supplies from another producer in the region is limited, we believe that, with the market continuing to embed at least a $10/bbl risk premium in prices, that the price risk is becoming more symmetric at these price levels as we believe that the market will experience a substantial correction toward our $105/bbl near-term target for Brent crude oil in coming months.
Consequently, we no longer believe that the risk-reward tradeoff merits a long oil position in the near-term, and we are closing our long April European ICE gasoil trading recommendation (first recommended on the January contract on November 10, 2010 at $953.25/mt, subsequently rolled to the March and April contracts for a total profit of $305.25/mt).
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fucking amazing that a single entity can move oil....not the dollar, not supply/demand, not war in the ME....just GS making its prediction. Long live the king.
Watch how the paper price doesn't match the market delivery price, this was attempted in 2007 as well, it didn't go well then. GS is presuming that governments and oil companies want cheap oil.
Let them chase wind mills.
dog: +++++
Yes, why anyone would buy or sell crude oil based upon the bullshit spin and manipulation that spews from GS is beyond my level of understanding.
And don't forget...the May crude options expire on Thursday. Fucking GS is probably short a bunch of calls and they're trying to cover their ass.
Oil is the heartbeat of the global economy. It has real value.
I made a little change on the bullshit etf USO. Got out last week, lucky me, may reload some calls next week. Dangerous trading indeed. Let's see beenie ben and goldshit can print some oil up. Remember this is opex week and the maker breakers are doing god's work.
Are you a GoldmanSachs client? Did you get a margin call? Bwahahahahahahaha
Well, another day, another fraud lawsuit filed against the Squid for FRAUD. This one over frauduluent margin calls.
http://www.bloomberg.com/news/2011-04-12/marvell-founders-accuse-goldman...
Don't you know that the 'Vampire Squid' prices everything in Zimbabwe dollars? Or maybe silver 'Liberty' dollars, I forget.
Ha! Goldman sucks telling their "customers" to give them a dip to buy or else. Love it.
That correction was long overdue IMO.
now if they can just say that the euro is going to parity....
Goldman Sachs is a firm that Ben Bernanke needed to let fail. There is nothing to see here...just side step their calls and move on with your trading life. L. Blankfein has no credibility.
That may be true, but the Bernank works for their owners.
Shit! That means gas over $6 in CA before May's out!
If you're lucky.
The way the dollar is nosediving (euro is at 18 month high) oil will easely go up to 135$
Goldman is betting that the strategical reserves will supress the prices but I don't think they realise at what cost that will be.
coxxukkers trying to negate the fiat inflation effect. perception is everything until reality finally overtakes it.
+1, great point -- this coupled with their disbanding of their commodties fund yesterday is just priceless. These market move attempts are good for a day or so, but no way they can stave off the inevitable
Oil stocks are getting brutalized.
But as usual, retail stocks are celebrating the crash in oil prices today.
Nordstrom, JC Penney, Williams-Sonoma, etc. all went straight up after the open.
And they'll go straight down at the close. What is your point with this comment?
Yeah make sure you sell before the USD hits 74. Which should be any second now.
Goldman Sachs Accused by Marvell Founders of Margin Call Fraud
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a14rzzx1M83E
When I saw NFLX down $3 in the pre-market, I thought for sure we were going to have a big down day.
But investors are cheering and rejoicing with the oil crash, and NFLX went completely vertical immediately after the open.
Wondering if GS and their employers ever seen the movie 300(million)?
You gottan know that when the MSM starts talking $4 and $5 gas, it's going the opposite direction real soon.
Not deep enough.
But then they've done too much damage on the upward side, that this is mostly a PR move.
Seriously, does GS really think that their little chartreaders can overwhelm the potential supply disruptions from the coming MENA wars?
This is nothing but Fed-demanded SPIN and manipulation.
Another poor oil analysis from Goldman:
>>
We believe that there are fundamental differences between now and the spring of 2008: Both inventories and spare capacity are much higher now
>>
This is in contrast to Spring 2008. Where is the increased spare capacity vs Spring 2008? KSA didn't drill more wells or install more pipeslines. Their alleged spare capacity is the same now as then. Iraq added about 300K bpd since then, but its near term spare production capacity is zero. It will take years to drill those holes and install their pipelines.
Inventories? The only relevant inventory is what's in the pipelines. Not what's in obsolete tanks that can't flow to the Gulf of Mexico. Was Brent higher than WTI in 2008? No.
Another relevant question: Was China consuming more oil in 2008 than now? No. Much less. India? No. Much less. KSA? No, they consumed less then. Almost everywhere consumed less then, with the exception of the US, who did not have 8.8% of the workforce not commuting then.
Bogus analysis.
Looks like real desparation time....kindof like when they advised to buy Bear Stearns.
Look at the market now! LOOK AT IT! There is NO market. There is a room full of computers next to where Duncan Niederauer takes his afternoon constitutional. There are buildings full of entirely immoral bankers and pathological analysts. There are overpaid, perma bull CEOs dumping the shit out of stock they talk glowingly about every day to you.
There is no market anymore, fool. There are bagholders...and they are nervous...their lies reaching creschendo...with some seriously hardcore Marxists waiting in the wings.
Thank you Wall Street. On with the flash crashes, I guess. I hear that M. Schapiro of the SEC is almost...almost done relentlessly meeting with members of the criminal syndicate about which rules she should forget, and which rules are ok to enforce. Almost.
Who came up with the ridiculous idea that commodities markets are targeted by Wall Street speculators?
What's a speculator?
Somebody who goes to McDonalds and hopes the cashier spills hot coffee over him or gets a chicken head in the Mc Chicken.
This a defense of the rising oil prices?
(noting the junks, I see someone doesnt like me defending a drop in oil)
Not sure who, but the way oil affects gas prices is part of it.
The only clear target that exists, are those speculators.
Is it possible that margin calls in gold,oil, and silver just caused a little selling in the equities to fund those calls? I would imagine that if that's the case then GS knew that would happen and are BTFD right now. No doubt today will end green.
Yeah...sure thing buddy. Only one problem...there is no market...and there will be no market until Ben Bernanke stops pumping counterfeit dollars into it and about 100,000 bankers are cleansed from the ranks...oh, and until the 4th estate returns to do the tough job "speaking truth to power."
So...sure...buy the dip...after about ten years of desperation, panic, prosecutions, capital destruction, naked short selling bear raids, bank breakups...and such.
There is no market, buddy.
http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/04/could-us-dollar-rise-50.html
Amazing that "Lord Blankfein" has this kind of power!
I follow WTI, not Brent. CME's website suggests it's around $120.50 right now. If those figures are representative, then we have a lot further to fall. I would have expected stocks to rally.
Shows how utterly manipulated this market really is. Despicable!
So Oil is the new Silver and GS is the new JPM?