Note from Bloomberg: "Goldman Sachs sees higher oil prices coming"

Post Reply
dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Note from Bloomberg: "Goldman Sachs sees higher oil prices coming"

Post by dan_s »

Bloomberg 3-31-2023

"Goldman Sachs Group Inc. is confident in crude’s upward trajectory even after banking turmoil caused the
bank to tamp down its price forecasts this year, according to Jeff Currie, global head of commodities .
“We would argue you should be buying the dip at this point,” Currie said during a Friday interview with Bloomberg Television.

“I have never seen a market sell off that sharply, but retain a bullish structure.”
Goldman's Q4 2023 price forecast for WTI is $93/bbl. Before the SVB bank failure, Currie's forecast was $100 WTI by Q4.

Citing encouraging macro data from China, Goldman still sees the nation’s rebound reinforcing a “solid recovery” into
the latter part of the year. The next catalyst for oil prices to rise is solid draws on a global basis, which the bank expects to
see by June, when demand usually takes off seasonally.

Oil is headed for a fifth monthly decline after panic in the wake of multiple bank failures sent the price crashing to
15-month lows. The major benchmarks, West Texas Intermediate and Brent, have begun to recover some of that ground as the fear of
contagion recedes and money managers return to the sector.
------------------------------
MY TAKE: All we need is less Fear of Recession for WTI to move quickly over $80/bbl. A close over $75/bbl today puts WTI back inside the $74 to $81 channel, which should keep the paper traders long until WTI moves over $80. The paper traders love channels and it will take bullish fundamental data to get them to hang on to long positions. Currie's forecast is based on demand for oil exceeding supply this summer. U.S. refiners ramping up to 95% of capacity in May should do the trick.
Dan Steffens
Energy Prospectus Group
Post Reply