Goldman Sachs Group Inc, the third-largest US securities firm, said oil will average US$46 a barrel next year, rising from US$42 a barrel this year because of higher costs and the need for more drilling to find reserves.
"The oil market is entering a new investment super-cycle for the first time since the 1970s," Jeffrey Currie, managing director at Goldman's global investment research, told reporters in Seoul yesterday.
"Poor returns in commodity sectors led investment to flow elsewhere," Currie said. "Inadequate investment has sustained higher oil prices. It's the revenge of the old economy."
In September, Goldman Sachs forecast oil will remain at about US$50 a barrel for the rest of the year and stay high next year.
Crude oil prices are forecast to rise from the current level of US$43, fall to US$44 in the second quarter and rise again to US$48 at the end of next year, Currie said.
"We forecast a dip in the second quarter because of a combination of a slowdown in economic growth and increased supplies of new fields coming on line in places like West Africa and Russia," he said.
Oil prices pushed past US$43 in Asian trade yesterday but the market was quite calm as the focus shifted to OPEC following a bloody attack on the US consulate in the port city of Jiddah, Saudi Arabia.
"The market discounted it immediately," Eswaran Ramasamy, the Singapore-based director for energy information provider Platts, said of the attack.