2023-07-31 07:57:27
Goldman Sachs Group analysts Daan Struyven and Yulia Zhestkova Grigsby said in a report that there are signs that oil supply is tightening and the market is turning to a situation where supply exceeds demand. Oil prices are expected to rise to $86 a barrel by the end of the year.
The report said that global oil demand hit a record high this month, while supply from Saudi Arabia was cut, and the market was facing a situation of undersupply.The bank expects in DecemberBrent Crude OilPrices will settle at $86 a barrel and rise to $93 a barrel in the second quarter of 2024.
The reduction in OPEC+ crude oil supply affects the outlook for oil prices. Earlier this month, Russian Deputy Prime Minister Alexander Novak said the country would cut crude exports by 500,000 barrels per day in August, and Saudi Arabia also said it would extend supply curbs next month.
Daan Struyven, head of oil research at Goldman Sachs, said a sizable shortfall is expected in the second half of the year, with oil demand approaching 2 million barrels per day in the third quarter as demand reaches record highs.
Struyven pointed out that although U.S. crude oil production has risen sharply to 12.7 million barrels per day in the past year, production growth will slow down in the rest of 2023. “We expect U.S. crude oil supply growth to slow sharply to just 200 bpd.”
The International Energy Agency forecast last month that oil demand would reach 2.4 million barrels per day in 2023, up from a rise of 2.3 million barrels a day the previous year.
However, Ed Morse, head of global commodities research at Citigroup, said that oil prices are unlikely to fall below $70 a barrel, but that “uncertain” events, including hurricanes, are needed to push oil prices above $90 a barrel. extreme weather events might change the outlook. Additionally, barriers to investing in fossil fuels and reduced demand are causing more market volatility.
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