Goldman updates oil outlook, maintains 12-month prediction of $93/barrel

Goldman Sachs, a major player in financial forecasting, has recently updated its predictions regarding global oil demand. The institution now anticipates a stronger demand for oil throughout the year, while maintaining its one-year forecast for Brent crude oil prices at $93 per barrel. Notably, in July, global oil demand reportedly surged to an unprecedented level of 102.8 million barrels per day. Goldman Sachs foresees a considerable shortfall in oil supply – projecting a deficit of 1.8 million barrels daily in the latter half of the current year, followed by a smaller, yet significant, deficit of 0.6 million barrels daily in 2024.

Several factors underpin this revised forecast. Reduced fears of a recession and proactive measures by OPEC to elevate oil prices contribute to an expectation of higher oil prices with reduced market volatility. Furthermore, Goldman Sachs has increased its estimate for oil demand by about 550,000 barrels per day. Concurrently, the bank anticipates a rise in the oil supply for 2023 by approximately 175,000 barrels daily.

However, the situation is not one-sided. Certain elements could potentially restrain a steep rise in oil prices. These include a notable expansion in OPEC's capacity to spare additional oil production, a revival in international offshore drilling projects, and a downward trend in the costs associated with oil production in the United States. These factors collectively could serve as a counterbalance to the otherwise upward pressure on oil prices, suggesting a more nuanced oil market landscape in the near future.

Read the full article on the Reuters.