Echoing commentary published here during the weekend, overnight Goldman’s chief commodity Jeffrey Currie repeated his recommendation to overweight allocation to oil to “hedge against increased geopolitical risks, driven by elevated US-Middle East tensions” which as of this weekend, have “broadened to include Saudi Arabia.” Specifically, Goldman now believes that “the balance of risks given the potential magnitude of supply shortfalls from Iran in the short-term or Saudi potentially outweighs for now a backdrop of weaker fundamentals and increased macro uncertainty. Although our 12m forecast for the S&P GSCI now stands at 3%, we still see significant portfolio value in staying long and including commodities in a diversified portfolio, particularly given the geopolitical environment.” Earlier on Monday oil spiked after Saudi Arabia vowed a strong retaliation amid the latest back and forth between the US and Riyadh. (Click to enlarge) Still, one should not overplay the potential of a Saudi-induced […]