Oil Price Forecast - Mar 8

[dan_s]

My forecast models are currently based on WTI oil price averaging $80/bbl for 2024 and $82.50/bbl for 2025.

Reuters: Goldman Sachs raised its summer 2024 Brent peak forecast by $2 a barrel to $87 as disruptions in the Red Sea contribute to modestly larger-than-expected draws in OECD commercial stocks, the bank said in a note dated Sunday. < WTI oil prices have been running about $5/bbl lower than Brent.
"OECD commercial stocks on land have drawn somewhat faster than expected as the redirection of flows away from the Red Sea has increased inventories on water."
Despite the Red Sea escalation, Goldman expects Brent to stay in the $70-90 range, noting that the muted price volatility despite the ongoing Middle East and Ukraine wars reflected a mode.

In my opinion, the oil price risk is to the upside. I believe that IEA is over-estimating supply growth; especially from the US. IEA has a long history of under-estimating demand growth. Demand for transportation fuels will increase by more than 2 million bpd over the next few months.