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Business - Reuters LONDON (Reuters) - Oil hurtled back up to $56 a barrel on Thursday as Gol dman Sachs bank, the biggest trader of energy derivatives, said prices c ould ultimately surge all the way above $100.
Oil prices have climbed around 25 percent this year as signals that rapid demand growth in emerging economies China and India will strain world s upply ignited heavy buying from big-money funds.
news) said in a research report on Thursday that oil markets have entered a "super-spike" period that could see prices rising as high as $105 a barrel. "We believe oil markets may have entered the early stages of what we have referred to as a "super spike" period -- a multi-year trading band of o il prices high enough to meaningfully reduce energy consumption and recr eate a spare capacity cushion only after which will lower energy prices return," Goldman's analysts wrote. Goldman's Global Investment Research note also raised the bank's 2005 and 2006 NYMEX crude price forecasts to $50 and $55 respectively, from $41 and $40. These forecasts sit at the top of a table of predictions from 25 analysts , consultants and government bodies surveyed by Reuters POLL>. Gasoline demand has been running two percent higher than last year in the past four weeks, despite record prices at the pump, making the 63 perc ent inventory surplus versus last year's level less comforting than it w ould appear. Also encouraging gains, the dollar -- the currency of global oil trade -- retreated further on Thursday from a five-month high against the yen. A weaker dollar has encouraged funds to switch money from treasury market s into commodities, as well as insulating fuel consumption in non-dollar economies from the impact of higher crude prices.
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