Ever since the fallout of world’s biggest investment banks, talks are ripe on how top analysts of the world have got it absolutely wrong in their predictions, be it real estate, commodities or equities.
The biggest anomaly can be seen in case of predictions for oil as can be gauged from the predictions made by two of world’s best – Goldman Sachs and Merrill Lynch.
In March 2008, when crude was at $100 per barrel and was rising everyday as if there was no looking back, Goldman Sachs predicted oil to touch $200 per barrel in very near future. The argument given was that with dollar falling and financial markets plagued with credit crunch, oil would draw the fancy of increasing numbers of investors.
Now its for everyone to been where those predictions went, as crude is inching towards $40.
The latest prediction has come from analysts at Merrill Lynch, who have given a target of $25 per barrel. The reasons which may contribute to this fall is vanishing of demand across all key oil consuming nations and chances of recession spreading to China.
However, most analysts are predicting that $100 per barrel seems to be a reasonable level for oil and it may hover around this level once the market stabilizes. But, still it is a tough call to take considering the volatility globally.