Will Oil Follow Goldman Price Target?

Updated from 1:51 p.m. EDT

The last time Goldman Sachs talked about how high crude oil prices could go, the commodity responded with a huge move up.

This week Goldman slapped a 2009 year-end target of $85 -- $95 by 2010 -- on crude in light of its recent rebound.

"The recent rally in WTI [West Texas Interrnediate crude oil] prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity," the Goldman note said. Goldman also lifted its three-month target from $52 to $75 a barrel.

In March 2008, Goldman had said that crude oil could go as high as $200 by 2010.

Crude hit an all-time high of around $147 a barrel in July 2008, but as the banking and credit crisis unwound, taking the global economy with it, oil began a precipitous decline, falling to $32 a barrel in December.

That said, crude settled up $2.69 a barrel to $68.81 on the New York Mercantile Exchange Thursday afternoon. The Amex Oil Index close up 1.8% to 987.05.

Are we headed for another wild ride in crude?

It doesn't seem likely. Although improving economic conditions are usually accompanied by a demand for more commodities, don't expect consumers to shrug as much as they did the last time oil soared, which could eventually crimp demand for fuel.

A return to $4-a-gallon gasoline won't be as palatable this time around, with persistent unemployment and two of the Detroit Three automakers -- GM(GM Quote) and Chrysler -- in bankruptcy. The automakers recently found some solace in less rapidly declining auto sales. But substantially higher-priced gasoline won't add to that hope.