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OIL: Oil Reaches Forecasted Summer Peak, Spreads Modestly Overvalued: Goldman

OIL

Oil has reached the forecasted summer peak of $86/bbl and time spreads are modestly overvalued, according to Goldman Sachs cited by Bloomberg. The Brent Q2 average was in line with the $85/bbl forecast.

  • China oil demand continues to decline as macroeconomic demand remains weak and refinery runs fell to a 20-month low with both independent and state refiners reducing runs over the past month.
  • Global net supply increased with visible net supply rising 1mb/d w/w on higher-than-expected production from Russia and Canada.
  • Support comes from US-led summer travel and robust global jet fuel demand up at a new post-pandemic high.
  • Geopolitical concerns remain as Houthi attacks and drone strikes on Russia continue.

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