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OIL: OPEC Measures Defend $70/bbl Brent Floor: Goldman

OIL
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The geopolitical risk premium priced into oil as of last week was “fairly modest” according to Daan Struyven, co-head of commodity research at Goldman Sachs speaking to CNBC.

  • “The market is focused on geopolitical risk with actual clear paths to lower production because a lot of geopolitical risk to supply has ultimately not realized since basically 2022,” Struyven said.
  • Goldman’s analysts think that oil is too low vs inventories and fundamentals by “perhaps $4/bbl or so” he said.
  • For 2025, Goldman think that a large market oil surplus “is not a done deal,” and points towards lower Iran production as a key short-term risk.
  • “When crude drops into the $70’s in Brent terms, OPEC tends to extend production measures, basically defending $70 as a floor for Brent,” he said.
  • Struyven said this defends Goldman’s range view of $70-85bbl for Brent.  
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The geopolitical risk premium priced into oil as of last week was “fairly modest” according to Daan Struyven, co-head of commodity research at Goldman Sachs speaking to CNBC.

  • “The market is focused on geopolitical risk with actual clear paths to lower production because a lot of geopolitical risk to supply has ultimately not realized since basically 2022,” Struyven said.
  • Goldman’s analysts think that oil is too low vs inventories and fundamentals by “perhaps $4/bbl or so” he said.
  • For 2025, Goldman think that a large market oil surplus “is not a done deal,” and points towards lower Iran production as a key short-term risk.
  • “When crude drops into the $70’s in Brent terms, OPEC tends to extend production measures, basically defending $70 as a floor for Brent,” he said.
  • Struyven said this defends Goldman’s range view of $70-85bbl for Brent.