Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) raised their forecasts for oil prices in 2011, with Goldman saying prices in the second half of the year should move significantly higher. JPMorgan sees oil prices moving to $85 a barrel.
Nomura International say oil prices could rise to over $100 a barrel in 2011, basing their assessment on whether or not the Federal Reserve inflates again through quantitative easing.
Knowing it will happen soon, it guarantees oil prices will rise going forward.
The only question remaining for the Federal Reserve to inflate is to what degree. How much will they spend is all that's left to be determined, not if they're going to spend.
If oil does reach or surpass $100 a barrel, it would compensate producers from the weakening of the U.S. dollar. If prices don't reach that high, or remain low, which is possible from slowing demand, it could put even more pressure on the global economy.
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