🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Oil Price Forecast Slashed at Goldman Sachs on Demand Concerns

Published 09/27/2022, 08:19 AM
Updated 09/27/2022, 08:28 AM
© Reuters.  Oil Price Forecast Slashed at Goldman Sachs on Demand Concerns

By Senad Karaahmetovic 

Goldman Sachs Head of Energy Research & Senior Commodity Strategist, Damien Courvalin, slashed the bank’s oil price forecasts despite saying the market remains "critically tight" on supply.

Crude oil prices are down over 35% since mid-June amid rising growth concerns. Moreover, the strong USD is also hurting oil prices with the dollar index (DXY) sitting at a 20-year high.

Despite slashing the 2023 forecast lower by $17.5/bbl on average, Courvalin remains bullish on oil prices.

"The structural bullish supply set-up - due to the lack of investment, low spare capacity and inventories - has only grown stronger, inevitably requiring much higher prices," he told clients in a client note.

JPMorgan told clients yesterday that it still expects oil prices to return to $100/bbl in Q4 despite mounting growth concerns. Both JPMorgan strategists and Courvalin see the Russian factor as one of the catalysts that could send oil prices higher.

"We continue to expect that Russian supply will decline into year-end when the EU embargo kicks-in alongside the end of the globally-coordinated SPR release. Based on these updated views, we still expect a seasonally adjusted global oil market deficit in 4Q22 and in 2023, taking account of builds required for demand growth and for the redirection of Russian oil," the GS strategist added.

Crude oil prices are up 2% today as the dollar takes a pause following a strong rally.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.