Oil prices have continued their upward move that began at the end of 2012, gaining over 8% in the past month.
Jeff Currie, GS's head of commodity research, said he wouldn't be surprised "if we woke up in summer and oil cost $150" per barrel.
That would be a 35% gain from Brent's recent price of $111.
Using the narrowing spread between the Brent price and that of West Texas Intermediate (WTI), at $95, Currie's forecast implies a 40% increase in WTI prices.
And there are many reasons oil could hit those highs by summer, or even sooner.
Why Oil Prices Continue to Rise
Currie says European sanctions imposed last January on Iranian imports, including oil, have reduced the global supply of oil, pushing prices upward.
He said other factors that will lead to higher oil prices include low global inventory levels and the fact that it is not possible for production capacity to increase in most oil-producing nations.
Currie pointed to government instability in many oil-producing nations, including Egypt, Iran, Iraq, Libya, Nigeria, Sudan, Syria and Venezuela.
Oil prices are also on the upswing because of the expectations of increased energy demand in countries including China and the United States.
China's economy grew 7.9% in the fourth quarter of 2012, up from the previous quarter's 7.4%. That's bullish for oil prices, as an improving Chinese economy will increase energy demand.
And recent positive economic data from the U.S. has made traders more optimistic that energy demand will increase in this country as well.
Home prices gained 7.4% in November from a year ago, the largest year-over-year increase since 2006, and home sales increased in 2012 for the first time since 2005. Unemployment claims also hit a five-year low last week.
Why the Shale Oil Boom Can't Keep Oil Prices Down
Despite the reasons for higher oil prices, some skeptics see the shale oil boom increasing production so much that oil prices go down.
Money Morning Global Energy Strategist Dr. Kent Moors explained last week why that's not the case.