Table of contents
Overview: The next leg up for oil markets—Still searching for demand destruction tipping point 3
Super-spike phase 1 (1999-2006): The initial big move up, energy’s return to market leadership status 8
Super-spike phase 2 (2007-end of decade?): Searching for the demand tipping point, capturing excess returns more challenging 18
Super-spike phase 3 (some time next decade?): The big step down and return to an environment where “normalized” returns and prices are less robust 30
US natural gas: Supply/demand trends improving in 2008 and 2009 31
Oil at the center of major global issues: Moderating demand for oil we think would go a long way towards lessening concerns 34
Bullish commodity view drives bullish global energy sector views and top picks 38
Disclosures 46
We would like to thank Jesal Dave, Pawan Kakumanu, Vardhana Aaditya, Pavan Hoskote, and Kyle Jenke for their contribution to this report.
The prices in the body of this report are based on the market close of September 13, 2007.
Goldman Sachs Global Energy Investment Research Team
Goldman Sachs Global Oil and