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Goldman Points to U.S. Election Volatility for Oil

OIL

Oil price volatility is at a 9-year low, which may be too low given its an election year according to Daan Struyven, Head of Oil Research at Goldman Sachs.

  • “We estimated that volatility would come down this year and last year because OPEC is balancing the market, while oil demand and GDP growth are broadly in line with their long run trends but there are a lot of open questions with respect to the election,” Struyven said.
  • On the supply side, a new U.S. administration could enforce stronger sanctions on Iran or boost domestic production levels while on the demand side, a potential trade war or domestic tax cuts pose questions.
  • Regulatory easing in the U.S. oil sector is expected under a second Trump administration Struyven said. These could include an expansion of leases on federal land or a rollback in the methane tax.
  • Rollbacks in regulations will likely have a more long-term impact and have little effect on the 2025 oil market Struyven added.
  • “We’re quite confident $90/bbl is a ceiling in most geopolitical and economic scenarios” Struyven said.
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Oil price volatility is at a 9-year low, which may be too low given its an election year according to Daan Struyven, Head of Oil Research at Goldman Sachs.

  • “We estimated that volatility would come down this year and last year because OPEC is balancing the market, while oil demand and GDP growth are broadly in line with their long run trends but there are a lot of open questions with respect to the election,” Struyven said.
  • On the supply side, a new U.S. administration could enforce stronger sanctions on Iran or boost domestic production levels while on the demand side, a potential trade war or domestic tax cuts pose questions.
  • Regulatory easing in the U.S. oil sector is expected under a second Trump administration Struyven said. These could include an expansion of leases on federal land or a rollback in the methane tax.
  • Rollbacks in regulations will likely have a more long-term impact and have little effect on the 2025 oil market Struyven added.
  • “We’re quite confident $90/bbl is a ceiling in most geopolitical and economic scenarios” Struyven said.