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Goldman Expects Oil to Go Higher from Here

OIL
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Goldman Sachs expects oil prices to rise from here according to its head of oil research Daan Struyven in a CNBC interview Monday.

  • “We expect oil prices will rise to the higher end of the $80-100/bbl OPEC range because of three reasons.” Struyven said.
  • Firstly, Struyven noted that demand has been strong this year and will remain solid next year, second, Goldman expects OPEC to keep supply lower for longer and “if necessary, cut more” Thirdly, Goldman thinks supply growth outside of OPEC, which surprised this year – will significantly slow into next year.
  • “We think that most of the supply gains outside of OPEC were mainly one off” referring to the US, Brazil, Iran, Nigeria and Venezuela in 2023.
  • On current oil price weakness, Struyven said that in September, the oil market was pricing in “very large inventory draws in the fall but that hasn’t happened” which has been helped by strong supply.
  • “The biggest surprise of 2023 has been stronger than expected non-OPEC supply growth – which we think will slow” Struyven said.
  • Struyven concluded that he thinks the main upside risk for oil is supply side disruptions, while the demand side forecast remains constructive. He said the level of supply side disruptions this year have been “remarkably low” despite the highly volatile geopolitical backdrop.
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Goldman Sachs expects oil prices to rise from here according to its head of oil research Daan Struyven in a CNBC interview Monday.

  • “We expect oil prices will rise to the higher end of the $80-100/bbl OPEC range because of three reasons.” Struyven said.
  • Firstly, Struyven noted that demand has been strong this year and will remain solid next year, second, Goldman expects OPEC to keep supply lower for longer and “if necessary, cut more” Thirdly, Goldman thinks supply growth outside of OPEC, which surprised this year – will significantly slow into next year.
  • “We think that most of the supply gains outside of OPEC were mainly one off” referring to the US, Brazil, Iran, Nigeria and Venezuela in 2023.
  • On current oil price weakness, Struyven said that in September, the oil market was pricing in “very large inventory draws in the fall but that hasn’t happened” which has been helped by strong supply.
  • “The biggest surprise of 2023 has been stronger than expected non-OPEC supply growth – which we think will slow” Struyven said.
  • Struyven concluded that he thinks the main upside risk for oil is supply side disruptions, while the demand side forecast remains constructive. He said the level of supply side disruptions this year have been “remarkably low” despite the highly volatile geopolitical backdrop.