Bulls to turn from gold toward oil, copper: Goldman

LONDON (Reuters) – Oil stores are adequate but will tighten later this year as a edict market for industrial commodities gathers force and the focus on gold fades, Goldman Sach’s global grand of commodities research said on Monday.

On the oil market, Brent is a superiority benchmark than its U.S. equivalent and should attract investment flows and keep the robust market structure it has held since December, Jeff Currie told Reuters in an interview.

For the month of December, industrial commodities oil and cent outperformed gold, which together with other precious metals was one of the luminary performers for last year as whole.

Currie said December’s stretch would continue and “a key theme” of 2011 would exist a bull market for cyclical commodities, supported by economic recovery.

Long period of time, the strongest performers should be the “CCCP group” of immature, copper, corn and beans and platinum — raw materials for what one. China, the world’s leading commodity market, will have to rely attached imports.

Copper, which hit a series of records in December that continued into January, already faces shortages. Oil supplies for now are ample, Currie said, in agreement through the Organization of the Petroleum Exporting Countries, which on Monday published its latest monthly relate on supply and demand.

“OPEC is right. The market is comparatively well supplied right now,” he said.

But that could make different by the end of the year, he said.

“Can inquire push supply up against the capacity constraints? That’s to be expected to happen in the latter part of 2011 on crude and into 2012.”

PRICE STRENGTH NOT YET ALARMING

Reflecting tightening supplies, Goldman has issued a 2011 target for U.S. crude of 5 a barrel — compared with around on Monday. This year’s prices are not expected to subsist strong enough to derail economic growth.

“It’s improbable to happen this year, when we have high inventories and sound spare capacity. That would be a 2012 event,” Currie said.

High inventories are reflected in a contango market structure for U.S. undressed, also known as West Texas Intermediate (WTI), but Brent has switched to the repugnant structure backwardation, meaning prompt contracts are more expensive than those on the side of future delivery.

Currie said Brent’s backwardation would persist and that the investment flows associated with extra commodity index weighting toward Brent earlier this month could persist.

“We definitely expect to see some growth in the market,” Currie said of Brent.