Goldman Sachs: oil price will bounce back to $120

GOLDMAN Sachs, which caused a commodities sell-off last month when it predicted the short-term peak of the market, said yesterday that investors should pile back in.

Analysts said “the risk/reward once again favours being long commodities” following a 10 per cent average dip in a basket of materials including crude oil, copper and platinum.

A note to investors said the mid-cycle pause in global economic recovery is nearing a trough, “creating upside to metal prices”, and that brent crude is now expected to end the year at $120 a barrel, up from an earlier prediction of $105.

The bullish note came as a UK parliamentary committee raised concerns about anti-competitive trading on the London Metal Exchange.

The science and technology committee said it would refer the matter to the Office of Fair Trading, after it noted that the same companies that dominate the metal trade also store the materials.