- Jeff Currie of Goldman Sachs says oil benchmarks could reach $115 per barrel by the end 2023 first quarter.
- The bank’s head for commodities research stated that tightening the supply will cause crude oil prices to rise.
- Currie said that OPEC+ member countries have granted themselves “optionality,” to increase oil production if the demand rises.
According to Goldman Sachs’ head for commodities research, Crude Oil Prices could rise to $115 per barrel in April 2019 as supply is squeezed by several factors.
Jeff Currie said, “You have an extremely tight supply situation going into 2023 which we believe will create significant upside.” CNBC Monday.
He mentioned a US stop at its releases Strategic Petroleum ReservePrices can be managed by the European Union’s December ban on Russian crude and a shortage of drilling, which will lead to a disappointing supply of US oil shale. All of these could drive crude oil prices higher.
Currie stated, “Our oil price target for the first quarter is $115 per barrel. But there’s upside risk.”
Due to Russia’s war against Ukraine, crude oil prices have risen this year. Supply has been squeezed by Western sanctions on Moscow.
Brent crude futuresThe international benchmark for oil prices, climbed 20.7% in the past year to trade at $93.81 per barrel on Tuesday. Meanwhile, WTI crude futures — the US benchmark, have climbed 16.9% to $87.34 a barrel in the same period.
The OPEC+ group of oil producers — which includes Russia and Saudi Arabia – said in early October they would cut oil production quotas by 2 million barrels a day. Analysts believe the move will drive up oil prices as it could affect supply.
According to the group, it is looking to increase its surpluses in the event of a global recession that causes a drop in demand. Investors are worried about China’s slowdown, which is the second-largest economy in the world. COVID-zero restrictions have been lifted and this will likely impact industrial activity.
Currie stated that OPEC+ was left with some “optionality,” which could boost supply if there is an unexpected rebound in the global economy by April.
CNBC reported that he said that the reason for the OPEC production reduction was recession concerns. “Let’s not forget that 90% of CEOs in America agree with them,” he said.
Currie said, “It’s certainly not our base-case forecast” and that they have the option to increase production.
Continue reading: Analysts warn that the oil market is concerned that Biden could release 100 million more barrels of crude oil from his strategic reserves.
