Dear clients,
Goldman Sachs Group Inc. cut its oil price forecasts and expects Brent to reach $100 a barrel by December rather than mid-year.
The bank remains one of the most bullish on Wall Street when it comes to commodities and believes the market has entered a super cycle. However, he now projects a supply surplus of 150,000 barrels a day this year after lowering demand forecasts for major economies and slightly upping production estimates in Russia and the US. Bank analysts say Brent is likely to average $92 a barrel this year, below their previous level of $98. The global benchmark has fallen nearly 2% since the end of 2022 to $84.30 a barrel.
The bank is skeptical that oil prices will still be high in the long term, and says Brent will average $100 next year.
The recovery of China’s economy from the coronavirus lockdown will lead to shortages in crude oil markets by June this year and „reveal structural underfunding,“ Goldman says. The bank added that OPEC producers may increase production in the second half of 2023 in order to balance supply and demand.
