At the date of releasing this episode, Goldman Sachs forecasted that Brent crude oil price might reach $135 per barrel in the second half of the year, Goldman Sachs bank predicts. This is $10 more than analysts expected in their previous forecast. The biggest problem, which can influence the growth of oil prices, is the growing deficit of this raw material on world markets.
According to the same report, Goldman Sachs analysts enumerate several reasons for changing the oil price forecast. Firstly, a record sale of the Strategic Petroleum Reserve, i.e., emergency oil stocks belonging to the United States, was recorded. This means that U.S. oil inventories have declined.
The second major factor is the changing economic situation in China. Covid restrictions in that country have led the oil market to its first surplus since June 2020. However, Beijing's low number of new Covid-19 cases allowed the capital on Monday to back away from the tight restrictions. As a result, Chinese demand will grow, and oil surpluses will run out.
According to the report, the future oil price will also be influenced by the situation in Russia. There were relatively small declines in oil exports from Russia in April and May, but the country will reduce production. Russian oil production will fall by 0.5 million barrels per day after the European Union embargo.
BUT: is it that true? Are we doing the right thing or the easy thing?
Emmanuel and I spent some time talking about the different factors that influenced the energy market and took a bit of a different approach to tackling the problem. We both believe that starving oil companies is the easy solution that isn't working and that achieving efficiency is the way to go.
Disclaimer: non of the content in this video constitutes investment advice.
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