• Oil prices have been on an ups and downs since the Corona pandemic
• Goldman Sachs sees upside potential
• Warning of shortage of supply
Advertising
Trade oil, gold, all commodities with leverage (up to 30) via CFD (starting at €100)
Participate in price fluctuations in oil, gold and other commodities with leverage and small spreads! With only 100 euros you can trade through leverage with the effect of 3,000 euros of capital.
Corona crisis sent oil prices down – Ukraine war is driving
Oil prices had experienced a turbulent development in recent years. At the beginning of the Corona crisis in 2020, the price of black gold collapsed so much due to a sudden shortage of demand that it was even negative. Since then, the price has recovered. Especially at the beginning of the war in Ukraine in February 2022, the price of oil shot up. With sanctions against Russia, the market feared a severe shortage of oil stocks, which gave further impetus to the price of the commodity. On March 8, 2022, the price of a barrel of WTI variety jumped to an annual high of 123.70 US dollars, while a barrel of North Sea Brent variety cost 127.98 US dollars. In the meantime, the strong upward momentum has calmed down again somewhat, a barrel is currently available for USD 76.43 (WTI) or USD 83.15 (Brent) (as of February 19, 2023).
Goldman Sachs expects boost for oil prices
But now the price of oil could break out again, as Jeff Curie, chief strategist at the major US bank Goldman Sachs, predicted to the news agency “Bloomberg” in early February. At an event in Saudi Arabia, the analyst expressed concern that further sanctions against Russia would result in lower oil exports. In addition, the expert expects demand for oil from China to recover after the People’s Republic gradually lifts its COVID restrictions. “Right now we still have a balanced surplus because China hasn’t fully recovered yet,” Currie told the agency. However, this could change in the course of the year if the demand for oil exceeds the supply. The market expert initially considered it likely that the deficit would occur by May.
Oil price could hit $100 mark
According to Currie, the supply deficit will then ensure that a large part of the oil producers’ previously unused capacities are exhausted, which should drive up the price of the liquid commodity. The financial house expected the price of oil to exceed the 100 US dollar mark again.
The supply of oil should therefore remain scarce in the months to come, Currie continued. The investments in expanding the production sites are too low to cover the demand. “Will we no longer have any free production capacity? We may have a serious problem from 2024,” says the Goldman strategist.
Parallels to record prices from 2007 and 2008
As Currie pointed out a few days earlier at a presentation in London, the commodities market is currently in a situation similar to that between 2007 and 2008. “Anyone remember what happened to oil prices between January 2007 and July 2008?” the chief analyst, according to Bloomberg. “The Fed is taking its foot off the brakes, China is accelerating, Europe is starting to grow rapidly,” Currie recalled. The only difference to the record increase in raw material prices almost 15 years ago is the availability of European natural gas. According to Currie, there should be enough stocks here for 2023. For almost all other critical raw materials, however, inventories are at critical levels, according to the expert.
Oil price forecast has now been adjusted
However, just a few days after the conference in Saudi Arabia, the major bank downgraded its outlook slightly, according to a Bloomberg report. Goldman Sachs now assumes that the price of Brent oil will not rise above 100 US dollars in the middle of the year, but will only reach the round mark at the turn of the year. Until then, the barrel price for the North Sea variety could then average around USD 92 instead of USD 98, which was previously estimated. “This adjustment reflects a slight weakening of our 2023 balance sheet,” Currie and his colleague Callum Bruce said in a statement obtained by the agency. For the rest of the year, the experts are assuming a supply surplus of 150,000 barrels per day. Not only is demand likely to be somewhat lower, but Russia and the USA are now likely to be producing larger quantities than previously assumed. On average, the oil price will then be around 100 US dollars in 2024.
Editorial office finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
Leverage must be between 2 and 20
No data
Image sources: sacura / Shutterstock.com, William Potter / Shutterstock.com