Goldman Sachs analysts :Another commodity bull is having second thoughts about crude oil.

Another bull bites the bullet

Wednesday, September 17, 2008

Another commodity bull is having second thoughts about crude oil. Goldman Sachs analysts made big headlines this year when they predicted oil would rise in a “super spike” to $200 (U.S.) a barrel. Now, they cut their three-month target to $115 a barrel from $149 previously. They cut their six-month target to $125 from $142.

However, that's still pretty bullish, given where oil prices have gone in recent weeks. With oil trading at about $93 a barrel on Wednesday afternoon, the new targets still imply a 24 per cent rise by the end of the year and a 34 per cent rise at the end of the first quarter of 2009.

“We will stand by our bullish view on oil but just think it will now take longer to get to our previous price targets,” the analysts said in their report. “The supply side of the market still remains severely constrained.”

The analysts' revision comes as rising development costs in the Canadian oil sands are overshadowing commodity moves. UTS Energy Corp. announced on Wednesday that the cost of the Fort Hills project has surged to about $24-billion (Cdn.) – a stunning 50 per cent increase since the preliminary estimate in June, 2007 – raising alarms about feasibility.

UTS, which has a 20 per cent stake in the project, saw its shares wilt 40 per cent on Wednesday. Teck Cominco Ltd., which also has a 20 per cent stake, fell 3.3 per cent. Petro-Canada, which owns a 60 per cent stake, fell 4.4 per cent.
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New SEC Short-Selling Rules Vow 'Zero Tolerance'

New SEC Short-Selling Rules Vow 'Zero Tolerance'

By Reuters
Reuters
17 Sep 2008 10:40 AM ET

New rules aimed against abusive naked short selling of stock in all publicly traded companies were issued by the U.S. Securities and Exchange Commission Wednesday.

The SEC's new rules, which include a requirement to deliver a security by the settlement date, are effective Thursday.

"These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," SEC Chairman Christopher Cox said in a statement.

Short sellers and their broker dealers are now required to deliver securities by the close of business on the settlement date, which is three days after the sale, or they will face penalties.

Broker-dealers failing to comply will be prohibited from further short sales in the same security unless the shares are pre-borrowed. That prohibition on the broker-dealer's activity will also apply to all short sales for any customer.

The SEC also adopted a rule that deems it fraudulent for customers to deceive broker-dealers about the intention or ability to deliver securities in time for settlement.

The third measure the SEC adopted requires option market makers to deliver securities by settlement date.

A "naked" short sale occurs when an investor sells stock that has not yet been borrowed.

Broker-dealers will sometimes accidentally fail to deliver stock to investors who have arranged to borrow it. If this is done intentionally, it is already illegal.
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