Although oil prices have fallen for two consecutive weeks for the first time since April, Goldman Sachs has increased its bullish bets on crude oil, predicting that international crude oil prices will hit $140 per barrel this summer.
Jeff Currie, chief commodities strategist at Goldman Sachs, believes that the recent drop in oil prices is a buying opportunity.
Goldman Sachs again bullish oil prices
On June 7, Goldman Sachs issued a report predicting that Brent crude oil prices would hit $140 per barrel. But since then, international crude oil has fallen for two consecutive weeks. On Monday (June 27) Eastern Time, Currie reiterated this expectation and reiterated the view that the current lack of investment in the oil and gas field will continue to drive oil prices up.
Since the start of the Russia-Ukraine war at the beginning of this year, the global market has been impacted, and international oil prices have soared by as much as 50%. However, after the Federal Reserve sharply raised interest rates by 75 basis points this month, the market has become increasingly worried about an economic recession, which has also led to a continued decline in international oil prices recently.
However, the most imminent factors affecting oil prices – the Russia-Ukraine conflict and Western sanctions still show no signs of easing. A senior U.S. official said on June 27 that leaders of the Group of Seven (G7) will commit to a new package of actions on June 28 to increase pressure on Russia or eventually set a cap on Russian oil prices.
Meanwhile, French President Emmanuel Macron said on Monday that the President of the United Arab Emirates had informed him that OPEC’s two main oil exporters, the United Arab Emirates and Saudi Arabia, were already extracting as much oil as possible and could hardly increase production.
Separately, Libya’s National Oil Company (NOC) said it may suspend oil exports from the Sirte Gulf region over the next three days amid the worsening political crisis. The closure of the Gulf of Sirte, which hosts many OPEC members’ major ports, may also spur higher oil prices in the short term.
Affected by the above news, international oil prices rose on Monday. WTI August crude oil futures closed up $1.95, or 1.81%, at $109.57 per barrel. Brent crude oil futures for August closed up $1.97, or 1.74%, at $115.09 per barrel.
Goldman Sachs predicts that Brent oil is expected to rise to US$140 per barrel in the summer, which means that Goldman Sachs predicts that the future upside of oil prices will exceed 20%.
Europe will have to seek
Oil as a natural gas alternative
“The situation across the energy sector is very positive right now,” Currie said. “Ultimately, the only way to solve these problems is to increase investment.”
He also cited turmoil in European energy markets as Russia has cut natural gas flows from the Nord Stream 1 pipeline in recent weeks.
On Monday, the European Union reached an energy storage resolution requiring that domestic natural gas storage levels must reach 80% before the winter of 2022. German Deputy Prime Minister and Minister of Economy and Climate Protection Habeck said that Germany will also start additional coal-fired power generation to replace the current natural gas power generation to strengthen natural gas reserves.
Currie believes that Europe will have to look for alternatives to natural gas, and oil will also be one of the options to replace natural gas. The upside momentum for oil and petroleum products is very high right now.
</p
