Goldman Sparks Crude Rebound

"It's an ego thing," says Phil Flynn, senior market analyst at Alaron Trading. "Goldman is really just catching up with where prices ought to be, as most firms still have $40 a barrel price targets. Fifty-five dollars is a more realistic outlook, and $105 is not that outlandish in case of an event such as supply disruption."

Flynn said a high-hype quotient isn't unfathomable, given the current volatility of energy prices. "Energy is the place to be today, it's where investment opportunities lay and money is to be found. The fundamentals are very bullish," Flynn said.

Referring to the Goldman Sachs' note, energy economist Jim Williams at WTRG Economics, said $100 a barrel is "certainly a possibility." Market powers such as increasing global consumption, Chinese oil demand and dicey politics in Venezuela are critical influences that can cause price pressure, Williams said.

Another concern driving energy prices Thursday was plummeting gasoline stockpiles ahead of the peak driving season. Yesterday's Energy Department report showed a more-than-expected 2.9 million-barrel drop in gasoline reserves, raising fears that the U.S. is not refining enough crude to meet a surging demand for fuel.

Oil prices remain below the record highs two weeks ago, as the dollar has rallied and traders reassess supply levels. Energy Department data showed a larger-than-expected increase in crude inventories, which triggered a massive selloff that took crude below $53 a barrel for a good part of the session. Prices rebounded late in the day.

Shares of most major oil producers were higher Thursday. Exxon Mobil(XOM Quote) gained 64 cents, or 1.08%, to $59.88; ChevronTexaco(CVX Quote) increased 6 cents, or 0.1%, to $58.32; Royal Dutch/Shell(RD Quote) rose 1 cent, or 0.02%, to $60.10; BP (BP Quote)rose 22 cent, or 0.35% to $62.52; and ConocoPhillips(COP Quote) increased $1.80, or 1.71%, to $107.23.

The Philadelphia Oil Service Sector Index, or OSX, has also moved up almost 5% today. The Amex Oil Index, or XOI, rose about 1.68%.

In stock news, Newfield Exploration (NFX Quote) was raised to outperform by Rehan Rashid, an analyst at Friedman Billing Ramsey. Rashid expects 10% growth in production for the company in each of the next two years, as well as a 15% production growth in 2007. He also raised his target price to $87 from $80. Shares rose $3.16, or 4.51%, to $73.96.

Cal Dive International(CDIS Quote) rose after closing a $300 million private placement of convertible notes. The shares gained $2.53, or 5.88%, to $54.53. Another company, Comstock Resources (CRK Quote), jumped after it priced 4.5 million shares at $27.50 each, pegging the total expected proceeds at about $121 million. Shares gained $1.16, or 4.27%, to $28.32.