Goldman Sachs sees oil at $ 140 next quarter

Oil prices are expected to extend their profits as global crude stockpiles will have to be redistributed amid a recovery in demand in China and a decline in Russian production, according to Goldman Sachs, which revised upwards its estimates for argon.

In particular, according to a newer analysis of the bank, prices should first move to $ 135 the barrel averaged over the next 12 months – against $ 10 more than Goldman had previously estimated – in order to normalize global stocks.

In this context, bank analysts now estimate that the price of Brent will reach $ 140 the barrel in the third quarter of the year, $ 15 more than their previous forecast, while in the next two quarters they will decline to $ 130 (revised upward price by $ 15 and $ 10 respectively).

It is noted that the global benchmark, the European crude Brent, is currently trading in the area of ​​$ 120, with its price having jumped more than 50% in 2022.

Recovery of demand after the pandemic and sanctions over the Russian invasion of Ukraine, which has disrupted global oil flows, pushed up prices and forced states to use strategic stocks to reduce their impact on consumers, Goldman said in a statement. .

However, bank analysts say commodity prices continue to rise and further demand is needed to balance the market next year, combined with a slowdown in global growth and increased output by OPEC members, including Iran. .

“The impact of declining global growth remains insufficient to balance inventories with current prices,” Goldman analysts said, adding that “oil prices need to rise further to offset unsustainable global stock lows.” “.

According to the analysis, world oil reserves are 75 million barrels less than previously expected and the global deficit is estimated to reach 400,000 barrels per day on average in the third quarter.

Although the loss of Russian production was smaller than expected, its production will fall further and the recovery of Chinese demand will probably restore the deficit in the market, Goldman estimates.

Russia’s production will be further reduced due to Western sanctions, falling by 1 million barrels per day by the end of the year from 10.8 million barrels per day in May, according to the bank, which estimates that large volumes of crude in Moscow redirected to mainly in Asia.

Although demand in China is recovering, the bank remains cautious in its estimates and predicts that lockdowns will have an impact on mobility in the country.