Goldman Maintains Bullish Oil Stance Calling July All Time High

Goldman Sachs has stuck to its Brent forecast of $86/bbl December 2023 and $93/bbl 12 months ahead. It cites an offset between a boost from a firmer demand outlook and the drag from higher-than-expected realized inventories and from formally incorporating higher-for-longer interest rates.

• The bank estimates global oil demand has risen to an all time high in July of 102.8mb/d and revised 2023 demand by around 550kb/d. It sees solid demand driving a larger-than-expected 1.8mb/d deficit in the second half this year and a 0.6 million bpd deficit in 2024.
• A reduced recession risk and a strong effort by OPEC to push up prices support Goldman's view on higher oil prices and an outlook for less volatility.
• Saudi supply cuts have brought back deficits, the Goldman analysts said, adding that they see the extra 1 million bpd Saudi cut to last through September and be halved from October.
• On Russian supply, Goldman analysts said “We now assume that Russia fully incorporates the first production cut of 500kb/d, but only partly implements the 500kb/d export cut.”