Exchange traded funds that track oil prices were set to get a lift Tuesday after analysts at Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) boosted their price targets on the commodity.
Goldman increased its 12-month price target on Brent crude oil to $130 a barrel and said it sees a more bullish trajectory after the correction.
“While near-term downside risk remains as the oil market negotiates the slowdown in the pace of world economic growth, we believe that the market will continue to tighten to critical levels by 2012, pushing oil prices substantially higher to restrain demand,” Goldman analysts wrote in a note.
Separately, Morgan Stanley raised its Brent forecast by 20% to average $120 a barrel this year and by 24% to $130 in 2012, Bloomberg reported.
U.S. Oil Fund (NYSEArca: USO) was up more than 1% in premarket trading Tuesday. The ETF is hovering around its 200-day moving average. [Oil ETFs Bounce at 200-Day Average]