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Agency predicts that oil prices will hit $90 per barrel before the end of the year

Agency predicts that oil prices will hit $90 per barrel before the end of the year

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  Under the influence of the Delta virus, crude oil is still gradually recovering, fuel demand growth has accelerated, coupled with the impact of Hurricane Ida on production, resulting in global supply shortages, Goldman Sachs will increase the price of Brent crude oil by the end of the year. Estimates have been raised from US$80 per barrel to US$90 per barrel.

Brent crude oil futures prices hit a nearly three-year high last week, because global production interruptions forced energy companies to extract large amounts of crude oil from inventories. As of 06:19 GMT on Monday, the price of Brent crude oil was US$79.19 per barrel, and the price of US West Texas Intermediate (WTI) crude oil was US$75.08 per barrel.

Goldman Sachs said in a report, "Although we have been holding bullish expectations for oil, the current global supply gap is larger than we originally thought. The recovery of global demand under the influence of the epidemic has even exceeded our expectations on Friday. It is also lower than our expectations."

Earlier this month, OPEC+ and its allies agreed to stick to the decision made in July to phase out record production cuts. Goldman Sachs said that the impact of Hurricane Ida on supply offset the impact of OPEC+'s increase in production since July, while non-OPEC+ and non-shale oil production continued to be disappointing.

Earlier this month, hurricanes "Ida" and "Nicholas" that swept through the U.S. Gulf of Mexico damaged drilling platforms, oil pipelines and crude oil processing centers, causing most of the offshore production to be interrupted for several weeks.

On the demand side, Goldman Sachs said that due to the global shortage of natural gas will increase fuel-fired power generation, the price upside risk in winter is "obviously" high. However, Goldman Sachs pointed out that a potential new mutant strain may put pressure on demand, and a sharp increase in OPEC+ production may ease the expected supply deficit, which is a key risk affecting the optimistic outlook of the oil market.

Goldman Sachs lowered its average forecast for the second and fourth quarters of 2022 from $85/barrel to $80/barrel.

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