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More on Goldman Sachs cutting its 2023 oil price forecasts

I posted last week on Goldman Sachs projecting Brent crude averaging $100 a barrel from October to December

  • and $108 a barrel in 2023.
  • Down from a prior of $125 for both time periods

A little further from the note:

Lower Chinese demand in particular will weigh on oil prices

  • GS expects China’s reopening from zero-COVID policies won’t happen until next summer, leaving 2023 oil demand flat compared to the fourth quarter of this year.

Goldman remains bullish overall

  • sees the recent “investor exodus” that priced in a large recession for crude to be overdone: “we believe that the decline in oil prices has overshot the downside risks to global oil demand.”

GS cite supply side issues that’ll support price:

  • investment, spare production capacity, and inventories all low
  • Biden administration’s releases from the Strategic Petroleum Reserve will stop this autumn
  • European Union’s embargo on seaborne Russian oil imports will kick in by December

More here