Oil prices drop on Goldman downgrade, European stocks spike
Source: AP-Excite
By PAN PYLAS
LONDON (AP) — A forecast downgrade from Goldman Sachs weighed on oil prices Monday, while European stock markets began the week on a perky note ahead of the start of the latest quarterly U.S. corporate reporting season.
KEEPING SCORE: In Europe, Germany's DAX rose 1.6 percent to 9,801 while France's CAC-40 added 1.5 percent to 4,243. Britain's FTSE 100 lagged, trading only 0.3 percent higher at 6,519. Wall Street was poised for solid gains at the open with Dow futures and the broader S&P 500 futures up 0.5 percent.
GOLDMAN'S OIL DOWNGRADE: In a wide-ranging note to clients assessing the recent plunge in oil markets, Goldman Sachs slashed its price forecasts for the coming two years. It said the benchmark New York rate would average $50.40 a barrel this year, way down on its previous forecast of $83.75. It also cut its Brent forecast to $70 a barrel from $90. In response, oil prices fell further, with the New York rate down 2.4 percent at $47.20 a barrel, while Brent slid 3 percent to $48.62.
ANALYST TAKE: "I think we're going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low," said Craig Erlam, market analyst at Alpari.
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I wonder who those low prices could possibly hurt? I know I'm not currently in any pain over lower gas prices. 