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Oil Market Is ‘Structurally Bullish,’ Goldman’s Currie Says

May 13 (Bloomberg) -- The oil market is “structurally bullish” and prices are likely to be higher in 12 months, according to a senior analyst at Goldman Sachs Group Inc.

The market will get into “critical shortages” in 2012, Jeffrey Currie, head of commodity research at the bank, said today in an interview in London. “Long-term and medium-term we’re still structurally bullish.”

Brent crude has risen 20 percent this year and West Texas Intermediate oil, the U.S. benchmark, is up 8.2 percent amid concern that unrest in North Africa and the Middle East will disrupt supplies as the global economy recovers. Crude last week had its biggest weekly decline in more than two years as U.S. economic indicators and a strengthening dollar triggered a five-day rout in commodity prices.

Volatility in oil prices will begin to stabilize next month as the market gets clearer signs on U.S. growth and the pace of monetary policy tightening in China, Currie said. The commodities market is currently going through “a rough patch” on weakness in macroeconomic data, he said.

‘Clearer Position’

“Once these fears exhibit some signs of stability you’ll be in a clearer position,” he said.

Oil demand will continue to expand even if the U.S. ends bond-buying efforts to support the economy, known as quantitative easing, or QE, Currie said.

“If there is real sustainable growth that was generated off the back of this QE, when you take it away, you may see a slowing in the growth rate, but growth should still be underlying intact,” he said today at the Platts Crude Oil Markets conference in London.

The International Energy Agency yesterday trimmed its 2011 global oil demand forecast for the first time as this year’s price rally begins to weigh on consumers. Consumption will expand 1.5 percent worldwide this year, the Paris-based agency said in its monthly report.

Goldman’s Currie said inflation pressures on policy makers in emerging economies will ease in the second half of the year, creating “a more positive environment for risky assets.”

Saudi Arabian production capacity is in the “vicinity” of 2008 levels, the Goldman Sachs analyst said at the London conference. Spare capacity isn’t expected to reach 2008 levels for another six to 12 months, Goldman said in an e-mail.

To contact the reporter on this story: Grant Smith in London at

To contact the editor responsible for this story: Stephen Voss at

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