| GEO Business|
| Oil prices near 70 dollars|
| Updated at: 0353 PST, Friday, June 05, 2009|
NEW YORK: Oil prices approached 70 dollars per barrel on Thursday after a new forecast from US investment bank Goldman Sachs anticipating global economy recovery.
New York's main futures contract, light sweet crude for delivery in July, hit a high of 69.60 dollars per barrel before closing at 68.57 dollars, up 2.45 dollars from Wednesday's close. Thursday's close was the highest since November 4.
London's Brent North Sea crude for July delivery gained 2.83 dollars to close at 68.71 dollars a barrel, the highest since October 21.
Prices took off as Goldman said prices could strike 85 dollars per barrel by the end of 2009.
Also helping was news that new claims for jobless benefits in the United States fell for a third consecutive week, fueling hopes the recession gripping the world's biggest energy conuming nation may be easing.
The price rally "precipitated on Goldman Sachs' report raising their crude oil target for the end of the year to 85 dollars and advising their clients to exit their short position on crude oil," said Andy Lipow, president of Lipow Oil Associates.
"There is a fair amount of investment money on the sidelines that doesn't want to miss a boom of commodities if the world economy stabilizes and begins to improve, that's really what we are seeing," he said.
Goldman Sachs said its bullish price forecast stemmed from a global economy recovery and energy shortage.
"As the financial crisis eases, an energy shortage lies ahead," it warned in a report. "The recent rally in prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity.
"We are raising our end-of-2009 price forecast (for New York crude) to 85 dollars per barrel from 65 dollars per barrel," the bank added.
Further ahead, Goldman predicted that prices could strike 95 dollars per barrel by the end of 2010.
After plunging from record highs above 147 dollars last July, oil prices touched multi-year lows in December, at one point nearing 32 dollars a barrel.
They have since clawed back ground, bouncing higher this week as the weak US currency made dollar-priced crude cheaper for buyers holding stronger currencies, in turn stimulating demand and pushing up prices.
Another factor for the price rise Thursday was a report indicating easing unemployment in the United States.
The Labor Department said the number of initial claims for jobless benefits in the week ending May 30 dipped to 621,000 from the previous week's revised figure of 625,000.