Goldman Bearish On Commodities Near-Term; Positive On 1 Year
LONDON, Apr 15, 2011 (Dow Jones Commodities News via Comtex) — Goldman Sachs maintained a bearish stance on commodities on a near-term basis, but raised several of its one-year prices estimates in a note to clients Friday.
While recommending a shift to an underweight commodity allocation in the short-term, Goldman analysts reiterated their view that several commodity markets, led by oil, will see demand outstrip supply later next year.
As a result, the investment bank raised its 12-month price forecasts for WTI and Brent crude oil, RBOB gasoline, USGC heating oil, Nymex natural gas, U.K. NBP natural gas, CBOT corn and NYBOT cocoa from previous estimates released in late March.
The most significant increase was in corn, which saw a 20% bump up in its one-year forecast from 580 cents a bushel to 700 cents a bushel. The bank increased its 12-month forecasts for WTI and Brent crude oil by 50 cents each, to $103.50 a barrel and $107 a barrel respectively.
“We maintain that commodity returns still have upside on a 12-month horizon, particularly following the correction in oil prices that we anticipate, barring further oil supply shocks,” the bank said in a note to clients. “We therefore maintain an overweight recommendation to commodities on a 12-month horizon.”
The note follows Monday’s announcement that Goldman is closing its long crude, copper, cotton and palladium basket trade, or CCCP, due to unfavorable near-term risk-reward indicators.
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