Crude futures soared above 127 U.S. dollars a barrel for the first time on Friday after investment bank Goldman Sachs raised its oil price forecast. (Xinhua/Reuters Photo) Photo Gallery>>>

    NEW YORK, May 16 (Xinhua) -- Crude futures soared above 127 U.S. dollars a barrel for the first time on Friday after investment bank Goldman Sachs raised its oil price forecast.

    Light, sweet crude futures for June delivery rose 2.17 dollars to close at 126.29 dollars a barrel on the New York Mercantile Exchange, after setting a all-time peak of 127.82 dollars a barrel since trading began in 1983. Oil prices have doubled in the past year.

    In London, Brent crude futures for June delivery settled at 124.99 dollars a barrel, trading up 3.74 dollars.

    Goldman Sachs, the most active investment bank in the energy markets, raised its average oil price forecast for the second half of this year to 141 dollars from 107 dollars a barrel on Friday.

    "To balance trend global GDP growth of 3.8 percent against trend supply growth of 1.0 percent, prices need to rise on average14 percent from here in the second half of 2008," the bank said in a report, adding that "resource protectionism" by many oil producing countries was curbing supply growth.

    Goldman also raised its average price projection for 2009 to 148 dollars a barrel.

    Goldman Sachs analyst Arjun N. Murti wrote in a report on May 6that supply shortage will send oil prices to between 150 to 200 dollars a barrel within next six months to two years. A price advance in oil futures, which gained 8.3 percent within one week, came one day after this prediction.

    He also wrote an article of "super spike" back in March 2005, predicting that crude may trade between 50 dollars to 105 dollars a barrel through 2009.

    As oil prices surging on falling dollar, analysts believe that nobody wants to bet against Goldman.

    Saudi Arabia, the world's largest oil exporter and the most influential member of the OPEC, has agreed to increase its oil production in order to meet customers' demand.

    "On May 10 we increased our response to our customers by 300,000 barrels because they asked for it," Saudi Oil Minister Ali al-Naimi said at a press conference in Riyadh on Friday. "So our production for June will be 9.45 million barrels per day. This is the request of about 50 customers worldwide."

    The announcement was made after a meeting between visiting U.S. President George W. Bush and Saudi King Abdullah. It is the second time in four months that Bush has visited this oil-rich country.

    Bush was satisfied "because our response is positive," al-Naimi said. Bush asked Saudi Arabia to lift oil production to ease rising oil prices in January, but was rebuffed.

    OPEC cut its 2008 global oil demand forecast for a second time in three months on Thursday. Turmoil in global financial markets is to blame for record oil prices, rather than a shortage of supply, it said.