Goldman Warns About Spare Capacity Capping Oil's Upside

Goldman see signs of demand growth slowdown in the oil market which adds downside risks for oil into next year according to Goldman Sachs’ head of oil research Daan Struyven speaking to CNBC this week.

• “The last big jet fuel boost after the pandemic is now behind us and I think the upside is capped by OPEC’s plans to bring barrel’s back to the market from October onwards, if the market allows it,” Struyven said.
• Geopolitical risk disruptions have largely priced out of markets because “ we haven’t seen a significant disruption to oil markets or supply and second, there is a lot of spare capacity,” Struyven said, adding that any shortfall could be filled by spare capacity.
• Goldmans base case for next year is Brent in the low $80’s and WTI in the high $70’s but the risks are skewed to the downside because of the high spare capacity and recession risks.