Analyst: Oil To Hit $120 Again By Winter
By Charles Kennedy - Aug 08, 2022, 1:30 PM CDT
While oil and gas prices may continue to weaken in the near term, by the time winter sets in, the market is going to become extremely tight and the per-barrel price of oil should return to around $120, Energy Aspects’ Amrita Sen told Bloomberg Surveillance on Monday.
Amrita Sen, director of research at Energy Aspects, discusses the factors behind her firm's bullish call for oil...
Sen suggests that while gasoline prices have declined, demand remains strong. Sen cites petrochemical weakness due to China’s back-and-forth COVID lockdowns, which have contributed to the high availability of nafta to be blended into gasoline. However, she insists this is “not a demand problem; it’s a supply problem”.
The national average per gallon of gasoline in the United States continued to fall on Monday, dropping to $4.059, according to AAA.
Today WTI is trading in the $89 to $91 per bbl range.
Sen said she is not expecting a “sudden increase” in prices due to upcoming seasonal refinery maintenance; however, by the time winter hits, and particularly after November, she expects supply to become “very, very tight”.
On November 1st, releases from the U.S. Strategic Petroleum Reserve (SPR) will halt. In March this year, the Biden administration ordered the release of 1 million barrels per day from the country’s emergency crude stockpile in a bid to lower gas prices. Last week, the SPR fell to its lowest level in nearly four decades, according to the U.S. Department of Energy data. < IMO a National Security Risk for political gain.
The stoppage of the SPR releases will then be followed by the implementation on December 1st of the European Union’s embargo on Russian crude.
This will also coincide with the meeting of the China party congress, which Sen says she believes could make way for some easing of the COVID lockdown restrictions that have tampered with demand.
“The market is going to tighten up very, very quickly,” Sen told Bloomberg. “We still maintain our forecast of $120 per barrel,” she added.
By Charles Kennedy for Oilprice.com
PS: Goldman Sachs oil forecast is $125/bbl by year-end.
Oil Price Forecast - Aug 8
Oil Price Forecast - Aug 8
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Forecast - Aug 8
Goldman Sachs Cuts Oil Price Forecast To $110 This Quarter
Mon, August 8, 2022 at 11:30 AM
Goldman Sachs revised down its Brent price forecast for this quarter to $110 a barrel, down from a previous projection of $140 per barrel, but the investment bank still believes the case for higher oil prices remains strong.
In recent weeks, oil prices have been driven down by low trading liquidity and “a mounting wall of worries,” Goldman said in a note on Sunday. Those worries include fears of recession, the Strategic Petroleum Reserve release in the U.S., the rebound in Russian crude oil production, and China’s snap COVID-related lockdowns, the bank’s strategists noted.
Goldman Sachs also revised down its fourth-quarter Brent price forecast to $125 a barrel from $130 per barrel previously expected. The 2023 projection, however, was left unchanged at $125 per barrel.
“We believe that the case for higher oil prices remains strong, even assuming all these negative shocks play out, with the market remaining in a larger deficit than we expected in recent months,” Goldman Sachs’s strategists wrote in the note carried by Bloomberg.
The bank has been bullish on oil all year, and it continues to be bullish on crude prices despite the cut in its near-term price forecasts.
In the middle of July, Goldman Sachs said that despite the ongoing market sell-off, “the skew to prices from here is squarely skewed to the upside.”
With low inventories and a potential Saudi/UAE ramp-up in production in the region of 500,000 barrels per day (bpd), which will further deplete “record low spare capacity,” the risks are firmly skewed to the upside, Goldman Sachs’ analysts wrote in the note in July.
In yesterday’s note, Goldman said, “We still expect that Brent prices will need to rally well above market forwards.”
Oil prices were trading at multi-month lows early on Monday, with Brent below $94 per barrel and WTI Crude just below $88 per barrel.
By Tsvetana Paraskova for Oilprice.com
Mon, August 8, 2022 at 11:30 AM
Goldman Sachs revised down its Brent price forecast for this quarter to $110 a barrel, down from a previous projection of $140 per barrel, but the investment bank still believes the case for higher oil prices remains strong.
In recent weeks, oil prices have been driven down by low trading liquidity and “a mounting wall of worries,” Goldman said in a note on Sunday. Those worries include fears of recession, the Strategic Petroleum Reserve release in the U.S., the rebound in Russian crude oil production, and China’s snap COVID-related lockdowns, the bank’s strategists noted.
Goldman Sachs also revised down its fourth-quarter Brent price forecast to $125 a barrel from $130 per barrel previously expected. The 2023 projection, however, was left unchanged at $125 per barrel.
“We believe that the case for higher oil prices remains strong, even assuming all these negative shocks play out, with the market remaining in a larger deficit than we expected in recent months,” Goldman Sachs’s strategists wrote in the note carried by Bloomberg.
The bank has been bullish on oil all year, and it continues to be bullish on crude prices despite the cut in its near-term price forecasts.
In the middle of July, Goldman Sachs said that despite the ongoing market sell-off, “the skew to prices from here is squarely skewed to the upside.”
With low inventories and a potential Saudi/UAE ramp-up in production in the region of 500,000 barrels per day (bpd), which will further deplete “record low spare capacity,” the risks are firmly skewed to the upside, Goldman Sachs’ analysts wrote in the note in July.
In yesterday’s note, Goldman said, “We still expect that Brent prices will need to rally well above market forwards.”
Oil prices were trading at multi-month lows early on Monday, with Brent below $94 per barrel and WTI Crude just below $88 per barrel.
By Tsvetana Paraskova for Oilprice.com
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group