Goldman Sachs: Sell Oil Now

Everyone on Wall Street is buzzing about Goldman Sachs’ (NYSE:GS) change of heart over commodities (NYSE:RJI). What about Oil (NYSE:USO)?

Although Oil prices may continue to head north in the long term, Goldman sees a short term trading opportunity based on relative valuation:

“The unfolding events in North Africa and the Middle East have pushed up Brent crude oil from $100/bbl in mid-February to over $125/bbl last Friday. These high prices levels invite comparison to the spring of 2008, when crude oil prices first breached these levels in May before peaking at over $145/bbl by early July. We believe that there are fundamental differences between now and the spring of 2008: Both inventories and spare capacity are much higher now and net speculative positions are four times as high as in June 2008.”

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