Goldman Sachs said it expects commodity prices to spike sharply higher next year, mimicking the moves in 2008 when oil almost hit $150 a barrel and other commodities touched a series of all-time highs. The U.S. bank said potential supply shortages created by years of underinvestment have been exacerbated by the global financial crisis and tight credit conditions.
"As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the market balanced," Goldman Sachs [GS 167.29  -1.35 (-0.80%)]analysts said in a research note dated Aug 5. "As the developed world increasingly begins to consume like Westerners the demands placed on the finite resources of the planet increases. This trend of human populations growing faster than the earth's ability to produce not only impacts food production but that of commodity usage."
Goldman Sachs made headlines in early 2008 after analyst Arjun Murti predicted oil prices could spike as high as $200 a barrel. Oil prices had never before traded above $100 a barrel until January 2008.
By July of that year, oil had hit a high of $147.21 in New York, before it crashed to almost $30 a barrel by the turn of the year as the recession slashed demand.
Prices have since recovered to around $70 a barrel, but some economists have already cautioned this level could be high enough to derail any economic recovery.
Other analysts have also said the commodity price spikes could have permanently destroyed some demand, especially in the developed world, which could mean last year's rally is unlikely to be repeated near-term.
Equity analyst Murti worked on the latest Goldman research note alongside the bank's commodity research team, led by Jeffrey Currie in London.
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