.Sept. 17 (Bloomberg) -- Goldman Sachs Group Inc. raised its
yearend oil price forecast to $85 a barrel and cited a ``high
risk'' of a jump above $90 a barrel as fuel inventories fall to
``critical'' levels in the fourth quarter.
Goldman increased its 2007 yearend forecast from a previous
prediction of $72 a barrel, and said OPEC's announcement last
week of a 500,000 barrel-a-day production increase was ``too
little too late'' to prevent prices from rising above $90 a
barrel later in the year.
Crude oil in New York last week touched a record $80.36 a
barrel on concern global supplies will be insufficient during
the northern hemisphere winter, when households buy more fuel
for heating. OPEC's move to assuage fears of a supply shortfall
won't be enough to stop fuel inventories falling to ``critical''
levels, Goldman analysts led by Jeffrey Currie, said in a
research note published today.
``The risk for $95 a barrel oil that we highlighted in July
have been mostly realized,'' the report said. Oil and oil-
product inventories among members of the Organization for
Economic Cooperation and Development are forecast to fall by 1.5
million barrels a day in the fourth quarter, compared with the
seasonal norm of a 0.5 million barrels a day drop, according to
the report.