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OIL: Goldman Points to Brent in mid-70's Next Year

OIL
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The oil market has switched away from geopolitical risks earlier this year to more focused on oversupply in 2025 according to Daan Struyven, Goldman Sachs co-head of global commodities research.

  • Inventories have shifted downwards but market sentiment has turned more negative he added.
  • Goldmans base case for oil is Brent in the mid-70’s next year if OPEC protect low 70’s as a floor and high spare capacity protects high 70’s.
  • The new U.S. administration does risk this range breaking out Struyven said. Significant Iran disruptions because of sanctions could cause a move into the 80’s over the short term but is protected by high spare capacity longer term.
  • “The two most significant areas for oil prices are on the supply side because of sanctions, the possibility of lower Iran supply”, while on the demand side Struyven pointed to tariffs “which could weigh on global GDP and therefore global oil demand.”
  • “Impact on U.S. oil production will be fairly minimal in the short term,” Struyven said.
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The oil market has switched away from geopolitical risks earlier this year to more focused on oversupply in 2025 according to Daan Struyven, Goldman Sachs co-head of global commodities research.

  • Inventories have shifted downwards but market sentiment has turned more negative he added.
  • Goldmans base case for oil is Brent in the mid-70’s next year if OPEC protect low 70’s as a floor and high spare capacity protects high 70’s.
  • The new U.S. administration does risk this range breaking out Struyven said. Significant Iran disruptions because of sanctions could cause a move into the 80’s over the short term but is protected by high spare capacity longer term.
  • “The two most significant areas for oil prices are on the supply side because of sanctions, the possibility of lower Iran supply”, while on the demand side Struyven pointed to tariffs “which could weigh on global GDP and therefore global oil demand.”
  • “Impact on U.S. oil production will be fairly minimal in the short term,” Struyven said.