By PAUL THARP, The New York Post
The forecast for the summer driving season: Hit the road early. Not to beat the traffic, but to beat the higher gas prices expected in mid-July.
Goldman Sachs’ crystal ball is proclaiming that oil will soon soar to $135 a barrel, and likely have service stations jacking up fuel prices to $5 a gallon in New York just like the summer of 2008 that preceded the recession.
Indeed, analysts say Goldman and the other oil trading giant that also has the might to move prices, JPMorgan Chase, have already placed their energy bets for the summer. JPMorgan predicts oil hitting $130 a barrel in the coming weeks.
Despite all the turmoil in the Middle East associated with the Arab Spring rioting, oil has fallen to the $100 level, closing out May with a stunning 12 percent drop.
But before the storm, the calm. There appears to be a backlash by some oil-pit analysts.
“Whoever would buy into these rising prices is just paying homage (to Wall Street firms) and helping the speculative positions,” said one oil trading source familiar with energy bets of Wall Street trading desks.
Gas prices, meanwhile, should benefit from the brief respite in oil prices.
“We should be seeing some big declines at the gas pumps after Memorial Day,” said energy analyst Peter Beutel of Cameron Hanover.
“Wholesale prices have been dropping, and that could cause some serious revisions downward at the pumps,” he said.
“The competition is fierce among the retailers, and whoever lowers his price first gets a big jump on everyone else and a lot of new business.”
Pump prices have dropped about 10 cents a gallon this week, while wholesale prices at the Nymex have steadily skidded 50 cents a gallon in the past two weeks.
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