Goldman Sachs Group Inc. has re-entered the realm of $100-per-barrel oil, revising its crude oil forecast upward as global demand reaches unprecedented heights and OPEC+ continues to tighten supply. After a surge of over 30% since mid-June, breaching $95 a barrel on Tuesday, the Wall Street bank has adjusted its 12-month projection for the global benchmark Brent to $100 a barrel, up from $93. However, Goldman Sachs noted in a statement that the majority of the surge in this crucial commodity has likely already occurred.
In recent months, oil has experienced a robust rally, hitting a 10-month peak, primarily due to significant supply constraints enforced by key OPEC+ members, Saudi Arabia and Russia. Optimistic economic prospects in the United States and China, the two largest economies, have also bolstered this surge, with inventories rapidly depleting. According to Goldman Sachs, most major economies are currently on course for a gradual economic slowdown.
The report dated September 20, authored by analysts Daan Struyven, Callum Bruce, and Yulia Zhestkova Grigsby, stated, “We anticipate that OPEC will be able to maintain Brent within the $80-to-$105 range in 2024, capitalizing on robust Asia-centric global demand growth.” They added that OPEC is unlikely to push prices to extremes, as it could negatively impact long-term demand.
Goldman predicts a market deficit of approximately 2 million barrels per day this quarter, followed by a shortfall of 1.1 million barrels per day in the last three months of 2023. They also stated that global consumption has reached an all-time high.
The recent surge in oil prices has reignited discussions about the possibility of $100-per-barrel pricing. Chevron Corp.’s Mike Wirth mentioned it as a possibility, citing tighter supplies and diminishing inventories.
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