Goldman Expects Market Deficit to Support $86/bbl Brent by December

Goldman Sachs expects to see the oil market pivot into deficits in 2H2023 and flat price Brent to continue to move higher towards its $86/bbl Dec-23 forecast.

• “We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven told CNBC.
• Struyven acknowledged that US crude oil production has risen significantly over the past year to 12.7 mn bpd, but he said that pace of growth will slow throughout the rest of 2023.
• In a sperate client note, Goldmans said it expects that a 2mb/d shock to its current 2H2023 balances – circa 2% of global supply – would be required for oil to reach three figures.
• The bank believes only a broad and decisive OPEC+ action would be capable of such a move – outwith a large, unexpected disruption.