Bulls to turn from gold toward oil, copper: Goldman

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

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

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

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

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

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

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

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

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

PRICE STRENGTH NOT YET ALARMING

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

“It’s unlikely to happen this year, when we have high inventories and not imaginary spare capacity. That would be a 2012 event,” Currie related.

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

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

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