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CommoditiesThe fundamental factors behind rising food and fuel prices
The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
For Reg AC certification, see page 40. For other important disclosures, see page 42, go to http://www.gs.com/research/hedge.html, or contact your investment representative.
Analysts employed by non-US affiliates are not required to take the NASD/NYSE analyst exam.
June 2008
Samantha Dart Goldman Sachs International 44-(0)207-552-9350 samantha.dart@gs.com
The structural oil price rally resumes, and starts to contaminate (tighten) the cyclical balance
Goldman Sachs Global Investment Research
3
Decomposing the price into timespreads (cyclical component) and the long-dated price (structural component)
$/bbl
Source: Goldman Sachs Commodities Research.
0
20
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012 2013 2014
The long-dated, secular component of price
Price = MC + d, where d is a delivery premium in a bull market or a discount in a bear market
In a cyclical bull market the spread is typically positive, reflecting a premium for prompt delivery
In a cyclical bear market the spread is negative reflecting the cost of carrying inventory
The short-term, cyclical component of price
Goldman Sachs Global Investment Research
4
WTI timespreads continue to reflect near-term fundamentals, such as inventory levels…
% 1m/60m WTI timespreads (vertical axis); total OECD stocks deviation from 10-year average in million bbls (horizontal)
Source: IEA, NYMEX, and Goldman Sachs Commodities Research.
-60%
-40%
-20%
0%
20%
40%
60%
80%
-200,000 -150,000 -100,000 -50,000 0 50,000 100,000 150,000 200,000
Goldman Sachs Global Investment Research
5
… while long-dated WTI prices continue to reflect long-term industry costs
$/bbl
Source: Goldman Sachs Commodities Research.
0.00
15.00
30.00
45.00
60.00
75.00
90.00
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
33240 33971 34701 35432 36162 36893 37623 38354 39084
Long-dated oil
Marginal costs
Marginal cost is defined as the average of the highest cost (or bottom quartile) producers
Goldman Sachs Global Investment Research
6
There is more than 4.0 million b/d of extremely high-cost oil production
$/bbl (vertical axis); thousand b/d (horizontal axis)
Source: Goldman Sachs Equity Research.
0.00
20.00
40.00
60.00
80.00
100.00
120.00
0 4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000 36,000
2006 2005 2004 2003
Required oil prices shifted upwards dramatically after 2003
It would now require 4 mb/d of extra low-cost spare capacity to sustainably push long-dated oil prices below $70/bbl
Goldman Sachs Global Investment Research
7
Increasing long-dated oil prices have driven the front of the curve higher
10.00
30.00
50.00
70.00
90.00
110.00
130.00
150.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Jun 24, 2008 forward curve
Nov 20, 2000 forward curve
Jun 12, 2007 forward curve
$/bbl
Source: NYMEX.
Long-dated oil prices continues to drive the market higher
The structural oil price rally resumes,
Goldman Sachs Global Investment Research
9
Long-dated oil prices had found an equilibrium at biofuel price levels…
Source: NYMEX and CBOT.
Log($/bbl)
2.5
3.0
3.5
4.0
4.5
5.0
5.5
1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Long-dated WTI price Vegetable oil price
Vegetable oil price gave an indication in 2004/05 of where the new reprice would stop. This time such a price level is unknown
Goldman Sachs Global Investment Research
10
… making biofuels economically viable and creating significant growth in their supplies
Source: IEA and Goldman Sachs Commodities Research.
Thousand b/d
0
500
1000
1500
2000
2500
3000
3500
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Biofuels
Tar Sands
Orinoco Belt
Post-2004/05 repricing the world has become
dependent upon biofuels and NGLS
Goldman Sachs Global Investment Research
11
Substitution: Btu, bushel and barrel convergence started last year
$/mmBtu
Source: NYMEX, ICE and Goldman Sachs Commodities Research.
0
5
10
15
20
25
30
Jan-95 Feb-96 Mar-97 Apr-98 May-99 Jun-00 Jul-01 Aug-02 Sep-03 Oct-04 Nov-05 Dec-06 Jan-08
WTI prices Corn prices Sugar prices
Prices are converging on a Btu basis
Goldman Sachs Global Investment Research
12
Source: FAO, USDA and Goldman Sachs Commodities Research.
Food demand is stable, feed demand is rising, and fuel demand is exploding
-10
10
30
50
70
90
110
130
60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06
Food (grains)
Feed (protein)
Fuel (biofuel)
Indices of per capita consumption, 2006=100
Goldman Sachs Global Investment Research
13
Source: FAO, USDA and Goldman Sachs Commodities Research.
Strong demand will require a substantial increase in acreage first time in decades
Index 1960 = 100
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15
Acreage
Yield
Demand
Forecast
In the past, demand growth has been met through yield growth. However, the strong demand growth ahead will create a need for substantial acreage expansion.
Goldman Sachs Global Investment Research
14
Source: USDA and Goldman Sachs Commodities Research.
Rapid expansion in fuel use has led to an increase in the trend demand growth for agricultural commodities
Billion metric tons
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14
2006 - 2015: 2.6%
Food demand
Feed demand
Fuel demand
1979-1988: 1.5%
1988-1997: 1.6%
1997-2006: 1.9%
Goldman Sachs Global Investment Research
15
Nearly all recent capacity (not supply) increases have come from non-conventional resources
Source: IEA and Goldman Sachs Commodities Research.
Thousand b/d
Oil supply growthTotal Crude* NGL/Cond Biofuel Tarsand
World 1050 115 450 425 60OPEC 550 250 300 0 0Non OPEC 500 -135 150 425 60
.
Total oil supply growth ( % composition)Total Crude* NGL/Cond Biofuel Tarsand
World 100% 11% 43% 40% 6%OPEC 100% 45% 55% 0% 0%Non OPEC 100% -27% 30% 85% 12%* for OPEC, average increase in 2008 production capacity
Goldman Sachs Global Investment Research
16
Conventional oil supplies have remained stagnant since 2004
Source: IEA and Goldman Sachs Commodities Research.
Thousand b/d
39000
40000
41000
42000
43000
44000
45000
Jan-00 Oct-00 Jul-01 Apr-02 Jan-03 Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08
24000
25000
26000
27000
28000
29000
30000
31000Conventional oil supplies have been
mostly stagnant since 2004
OPEC(right axis)
Non-OPEC(left axis)
This year OPEC simplybrought back online capacity
that was previously shutin
Goldman Sachs Global Investment Research
17
Trend oil supply growth has slowed over the past several years to 1.0% per year
Source: IEA and Goldman Sachs Commodities Research.
% change
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009E
Since 2004, annual trend supply growth has slowed to 1.0% from 1.8% and growth
above this level would be difficult given the current
politically constrained environment
Goldman Sachs Global Investment Research
18
Rising prices slow demand growth, not simply high prices
Percent
Source: DOE, NYMEX and Goldman Sachs Commodities Research.
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
US motor gasoline demand growth(left axis)
US retail motor gasoline price inflation(right axis)
Goldman Sachs Global Investment Research
19
Rising prices over the past 6 years have already reduced demand by over 5.0 million b/d
Source: IEA and Goldman Sachs Commodities Research.
Thousand b/d
60000
65000
70000
75000
80000
85000
90000
95000
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Over 5 mmb/d of demand is being held out of market by higher prices
Had price remained at $20/bbl, we would likely see global demand over 92.2
mmb/d
Goldman Sachs Global Investment Research
20
… at roughly the same rate at which it is currently rising, and at which is rose in 2004-2005
Source: NYMEX and Goldman Sachs Commodities Research.
5-year forward WTI crude oil price in log($/bbl)
y = 0.0023x + 1.4384
R2 = 0.947
y = 0.0023x + 0.4142
R2 = 0.9313
2.5
3.0
3.5
4.0
4.5
5.0
5.5
2001 2002 2003 2004 2005 2006 2007 2008
The implied annual price change in
2004/05 was 54%
The current implied annual price
change is56%
Exp(log(5)) = $148.41/bbl which would be the end of year target for long-dated oil prices given current rate of increase
Goldman Sachs Global Investment Research
21
OECD total petroleum inventories will likely increase to slightly above the 10-year average path
Million barrels
Source: IEA and Goldman Sachs Commodities Research.
2300
2400
2500
2600
2700
2800
2900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
10y mean 10y max 10y min
20072008
Goldman Sachs Global Investment Research
22
We expect prices to rise to $149/bbl by year’s end
Source: NYMEX and Goldman Sachs Commodities Research.
$/bbl
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09
Market Forward Curve
Goldman Sachs Forecast
The investment phase continues, forcing demand to adjust
The Revenge of the old economy and beyond,
Goldman Sachs Global Investment Research
24
The industry has exhausted spare capacity, ending an exploitation phase and beginning a new investment phase
20
30
40
50
60
70
80
90
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05
Global production capacity
Global output
Source: International Energy Agency (IEA), DOE, and Goldman Sachs Commodities Research.
million b/d
Global oil production and capacity Global refining capacity
million b/d
20
30
40
50
60
70
80
90
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05
Global Refining Capacity
World Petroleum Supply
World Petroleum Demand
Goldman Sachs Global Investment Research
25
The oil market is now six years into an investment phase as spare capacity was exhausted in 2001
US data in real 2000 log $
Source: US Bureau of Economic Analysis, Goldman Sachs Commodities Research.
11.0
11.5
12.0
12.5
13.0
13.5
1901 1908 1915 1922 1929 1936 1943 1950 1957 1964 1971 1978 1985 1992 1999 2006
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5Investment
Phase
Investment Phase
Investment Phase
Exploitation Phase
Exploitation Phase
Exploitation Phase
Exploitation Phase
Net Energy investment(right axis)
Net Energy Capital Stock(left axis)
Goldman Sachs Global Investment Research
26
Prices rise in investment phases as costs increase
Log of real prices in $/bbl
Source: Pennwell.
0
1
2
3
4
5
6
7
1925 1933 1941 1949 1957 1965 1973 1981 1989 1997 2005
Investment Phase
Investment Phase
Exploitation Phase
Exploitation Phase
Exploitation Phase
Investment Phase
Goldman Sachs Global Investment Research
27
Returns have improved, but not significantly, as costs have also risen along with prices
Average cash return among oil integrated companies
Source: Goldman Sachs Equities Research.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007E
Real cash return over cash invested 40-year average 5-year moving average
The revenge of the old economy creates a rise in returns, which attracts capital back to the sector
Poor returns in the 1990s caused capital to be redirected into the new economy
But policy constraints put a cap on further increases and on the ability to attract capital, regardless of price increases
demand and tight supply continues to support market
Despite likely US recession, robust emerging market
Goldman Sachs Global Investment Research
29
Global growth is expected to moderate this year, particularly in 1H08, but is expected to start recovering in 2H08
Source: Goldman Sachs Economics Research.
Percent
'05
'06'07E
'08E09E
0
1
2
3
4
5
6
7
8
9
10
11
12
13
BRICS China US Euroland Japan World
Trend
Goldman Sachs Global Investment Research
30
… however, OECD oil demand growth has been comparable to recessionary levels for the past 2 years
Year-over-year growth in %
Source: IEA and Goldman Sachs Commodities Research.
-3.5%
-2.5%
-1.5%
-0.5%
0.5%
1.5%
2.5%
3.5%
4.5%
5.5%
6.5%
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
-5.5%
-3.5%
-1.5%
0.5%
2.5%
4.5%
6.5%
8.5%
OECD oil demand(left axis)
OECD GDP(right axis)
Goldman Sachs Global Investment Research
31
Non-OECD countries have been the engine of oil demand growth over the past few years, and will likely remain so in 2008
Change year over year in thousand b/d
Source: IEA and Goldman Sachs Commodities Research.
-500
0
500
1000
1500
2000
2500
3000
3500
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
E
2008
E
OECD Non-OECD
Goldman Sachs Global Investment Research
32
Stagnation: producer country demand has squeezed the consumer countries' access to resources
Trend demand growth
Source: BP Statistical Book and Goldman Sachs Commodities Research.
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
High-growth consumers
Low-growth consumers
Producers
Goldman Sachs Global Investment Research
33
Middle East oil exports have not increased substantially since 2000
Thousand b/d (both axis)
Source: IEA and Goldman Sachs Commodities Research.
10000
12000
14000
16000
18000
20000
22000
24000
26000
28000
1Q19
95
4Q19
95
3Q19
96
2Q19
97
1Q19
98
4Q19
98
3Q19
99
2Q20
00
1Q20
01
4Q20
01
3Q20
02
2Q20
03
1Q20
04
4Q20
04
3Q20
05
2Q20
06
1Q20
07
4000
4500
5000
5500
6000
6500
7000Middle East demand is up 35% since 2000 (right axis)Supply is up 2.0 million
b/d since 2000 (left axis)
However, exports are below 2000 levels
(left axis)
Goldman Sachs Global Investment Research
34
And despite the recent fuel subsidy cuts, estimated impact on demand is limited
Thousand b/d, unless otherwise indicated
Source: IEA, Bloomberg and Goldman Sachs Commodities Research.
CountryLevel (kb/d)
Share of global
Change (kb/d)
Share of global
Average case
High case
What changed
Indonesia 1,221 1% 5 2% (4) (8) 33% gasoline price increase to $2.44/gal; 28% diesel price increase to $2.23/gal in May08
Sri Lanka 89 0% 1 0% (0) (0) 31% gasoline price increase to $5.97/gal; 38% diesel price increase to $3.86/gal in May08
Taiwan 1,006 1% 33 16% (2) (3) 12% gasoline price increase to $4.35/gal; 17% diesel price increase to $3.97/gal in May08
Egypt 664 1% 48 23% (3) (6) 50% gasoline price increase to $1.25/gal; 46% diesel price increase to $0.76/gal in May08
Pakistan 396 0% 21 10% (1) (2) Four fuel price increases so far this year have raised gasoline and diesel prices 15% year on year, leaving current prices at $3.91/gal and $2.54/gal, respectively
Russia 4,113 5% 31 15% (7) (14) Gasoline prices up 11% year-on-year in 1Q2008, at $3.64/gal
J ordan 102 0% (1) 0% (0) (1) 6% gasoline price increase to $3.98/gal in May08
Syria 276 0% 4 2% (0) (1) 11% gasoline price increase to $3.37/gal in Mar08
Chile 260 0% 6 3% 0 0 Announced an 8% subsidy to gasoline prices in J un08
Malaysia 535 1% 24 12% (2) (4) 40% gasoline price increase to $3.14/gal; 67% diesel price increase to $3.03/gal in J un08
India 2,789 3% 147 71% (2) (5) 10% fuel price hike in J un08, raising gasoline and diesel prices to $4.50/gal and $3.10/gal, respectively
China 7,542 9% 329 159% (11) (22) 16% gasoline price increase to $2.84/gal; 18% diesel price increase to $2.97/gal in J un08
Total 1 8,127 9% 148 71% (32) (64)
Bangladesh 87 0% 2 1% (0) (0) Announced intentions to increase fuel prices in the near term
Total 2 27,207 32% 798 386% (32) (64)
* For Bangladesh, estimated impact on 2008 average demand was calculated assuming a 25% fuel price increase as of J une 2008.
2007 oil demand Demand growthEstimated 2008
demand loss
Speculation blamed, but not the cause
Goldman Sachs Global Investment Research
36
Once again speculators are the focus of attention
Source: Factiva, NYMEX, and Goldman Sachs Commodities Research.
Number of cites (left axis); % change year over year (right axis)
0
50
100
150
200
250
2003 2004 2005 2006 2007 2008
0%
10%
20%
30%
40%
50%
60%
Media citations to 'Oil Speculation' % Change in long-dated oil price
Reference to oil speculators
reached a peak in 2004, the last time the market
re-priced
Today the market is re-pricing and oil
speculation references are
increasing once again
Goldman Sachs Global Investment Research
37
Cyclically, the commodity markets havebehaved normally, pricing an economic slowdown
%, 1-60 month WTI crude oil timespread (left axis);$/bbl, WTI crude oil price at $100/bbl back-end (right axis)
Source: NYMEX and Goldman Sachs Commodities Research.
-40%
-20%
0%
20%
40%
60%
80%
Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08
60
70
80
90
100
110
120
130
140
150
160
170
180
+2 Standard Deviations
+1 Standard Deviation
-2 Standard Deviations
-1 Standard Deviation
10-year average
OPEC increases production into Asian Financial Crisis
September 11, 2001
Historically warm winter,speculative liquidation
Cyclical weakening as world economy slows
Goldman Sachs Global Investment Research
38
Speculative positions mainly drive changes inWTI timespreads
1st-60th month timespread in $/bbl (left axis); million barrels (right axis)
Source: NYMEX, CFTC and Goldman Sachs Commodities Research.
-15
-10
-5
0
5
10
15
20
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08
0
50
100
150
200
250
300
Net speculative length(right axis)
1st-60th month timespread(left axis)
Goldman Sachs Global Investment Research
39
Weaker timespreads (the cyclical component) have been offset by stronger long-dated prices (the structural component)
$/bbl
Source: NYMEX.
-10
-5
0
5
10
15
20
11-May-07 11-Jul-07 11-Sep-07 11-Nov-07 11-Jan-08 11-Mar-08 11-May-08
60
70
80
90
100
110
120
130
1st-60th month WTI timespread(left axis)
5-yr forward WTI price(right axis)
Goldman Sachs Global Investment Research
40
REG AC
I, Samantha Dart, hereby certify that all of the views expressed in this report accurately reflect my personal views, which have not been influenced by considerations of the firm's business or client relationships.
DisclosuresJune 25, 2008
Goldman Sachs Global Investment Research
42
Disclosures
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Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership.
Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst’s investment outlook on the coverage group relative to the group’s historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.
Not Rated (NR). The investment rating and target price, if any, have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances . Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient fundamental basis for determining an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.
Ratings, coverage views and related definitions prior to June 26, 2006
Our rating system requires that analysts rank order the stocks in their coverage groups and assign one of three investment ratings (see definitions below) within a ratings distribution guideline of no more than 25% of the stocks should be rated Outperform and no fewer than 10% rated Underperform. The analyst assigns one of three coverage views (see definitions below), which represents the analyst’s investment outlook on the coverage group relative to the group’s historical fundamentals and valuation. Each coverage group, listing all stocks covered in that group, is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html.
Definitions
Outperform (OP). We expect this stock to outperform the median total return for the analyst's coverage universe over the next 12 months. In-Line (IL). We expect this stock to perform in line with the median total return for the analyst's coverage universe over the next 12 months. Underperform (U). We expect this stock to underperform the median total return for the analyst's coverage universe over the next 12 months
Coverage views: Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.
Current Investment List (CIL). We expect stocks on this list to provide an absolute total return of approximately 15%-20% over the next 12 months. We only assign this designation to stocks rated Outperform. We require a 12-month price target for stocks with this designation. Each stock on the CIL will automatically come off the list after 90 days unless renewed by the covering analyst and the relevant Regional Investment Review Committee.
Goldman Sachs Global Investment Research
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Disclosures
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The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuant to certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy.
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This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst’s judgment.
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Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
We and our affiliates, officers, directors, and employees, excluding equity analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of the investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.
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