Goldman Sachs sees oil prices heading to $100 a barrel by the third quarter of 2023 amid China reopening
Goldman Sachs sees oil prices climbing to $100 a barrel by the third quarter of 2023 as the reopening of China's economy coincides with more OPEC pricing power to squeeze supply. , Nikhil Bhandari, co-head of APAC natural resources and clean energy research at Goldman Sachs, said a rebound in global demand this year would outpace supply projections, adding a premium to crude oil.
"We think the oil market is not prepared for any sequential demand growth because supply isn't really growing this year," Bhandari said, predicting China's reopening following pandemic restrictions will add 1.6 million barrels per day in oil demand.The analyst added that crude supply wasn't in a place to accommodate Chinese resurgence"because of the underinvestment we've seen over the last few years in oil assets.
The increase in oil prices projected by Goldman Sachs would represent a 22% rise on current levels ofThe price of a barrel of oil in the US has dipped more than 33% from highs around $122 reached in June last year, amid an increase in stockpiles and a slowdown in global economic demand. Bhandari also said conversations among investors in Europe had been moving from the effects of a Russian price cap to a Russian product embargo, which will involve theimports of refined Russian products, such as diesel, naphtha and fuel oil, on February 5.
"The fifth of February product embargo could be more disruptive to the product prices, not necessarily crude but to the product prices by way of higher refining margins of diesel," Bhandari said.
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