Oil bounces after Goldman raises prices forecast
Crude prices bounced on Tuesday after Goldman Sach raised its forecasts for London Brent crude, Xinhua reported.
Light, sweet crude for July delivery bounced 1.89 U.S. dollars, or 1.93 percent to settle at 99.59 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery also gained and last traded above 112 dollars a barrel.
Goldman Sachs on Tuesday raised its year-end forecast for London Brent crude to 120 dollars a barrel from 105 dollars a barrel and its one-year estimates to 130 dollars a barrel from 107 dollars. The bank also estimated the prices of London Brent will reach 140 dollars a barrel at the end of 2012, citing the loss of Libya's crude production would lead to a tightening supply-demand relation.
Morgan Stanley also increased its forecast for average Brent crude this year by 20 percent to 120 dollars a barrel and by 24 percent for 2012 to 130 dollars a barrel.
Their forecasts were echoed by JP Morgan Chase & Co. who estimated on Monday that London Brent would touch 130 dollars a barrel in the third quarter of 2011, citing "compelling evidence the global economy will bounce back from temporary setbacks."
And the weakening dollar also helped push oil higher. On Tuesday, the euro rebounded about 0.5 percent after a sharp drop on the previous trading session. The dollar fell about 0.4 percent against a basket of currencies.
However, the investors still remained concerned about the European debt crisis, slowing U.S. economic growth and the demand from emerging markets, which resulted in a choppy trading day. The U.S. benchmark seesawed between 96.61 dollars to 100.09 dollars a barrel.