Investors who sold off oil following the bearish warnings from Goldman Sachs (NYSE: GS) may be kicking themselves today after crude gained $3.17 during Wednesday’s trading session. Crude closed at $111.45 today, just a little more than a dollar short of recent highs. Profit taking became popular last week after Goldman suggested oil investors sell in the wake of reports that high prices were lowering demand. Whether or not that’s true did not appear to be of concern for investors today who sent Brent crude up two percent to close at $124.02.
A weak dollar drove up stocks across the board today and oil was no exception. Continued Middle East speculation also contributed to higher prices. Support for high oil prices is maintained despite reports on demand because of the financial drivers behind it.
Analysts maintain that despite volatility and fluctutation in crude prices and by association, related ETFs, there remains an upside to oil and prices will continue to rise into the summer. Oil prices at the pump are expected to reach as high as $5 a gallon by this summer according to some commodities experts, but the pressure this would put on both the general public, paying higher prices at the pump and the extra overhead endured by companies with may keep them from maintaining those levels. The demand-decline argument seemed convincing following the Goldman announcement with prices closing in on peak levels again today, it may be harder to convince investors to sell and push prices lower. That being said it seems the upside will continue at least in the short-term.
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