Goldman Sachs raised its forecast yesterday for the average price of West Texas Intermediate crude in the second half of 2008 to $141 a barrel from $107 a barrel. Long-term oil prices will need to continue to rise to bring trend oil demand growth in line with trend supply growth, which stands at around 1% a year, Goldman said.

“We believe that the market is not defying fundamentals but rather experiencing a structural repricing much like it did in 2004, searching for a new equilibrium against an uncertain long-term supply environment,” Goldman wrote.

Source: Oil Blasts to Nearly $128 Before Easing