Oil sinks on surplus, Goldman report

Associated Press / April 13, 2011

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NEW YORK — Oil dropped to the lowest level this month yesterday as energy specialists said the world will remain flush with surplus oil this year despite the loss of Libya’s exports and increased demand from Japan.

Oil was also pushed down after Goldman Sachs warned investors that the price had already topped its second-quarter forecast and is due for a “substantial pullback’’ in the near term. Traders took special notice of Goldman’s warning because the investment bank is considered a big player in oil markets, and it’s known for bullish price forecasts.

Benchmark West Texas Intermediate crude fell $3.67 to $106.25 per barrel on the New York Mercantile Exchange.

Goldman analyst David Greely noted that global supplies remain “adequate’’ even though the rebellion in Libya shut down production there.

The US average for a gallon of regular gasoline rose 2 cents yesterday to $3.79, according to AAA, Wright Express, and Oil Price Information Service.