• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 12 hours US top CEO's are spending their own money on the midterm elections
  • 10 hours EU to Splash Billions on Battery Factories
  • 9 mins Satellite Moons to Replace Streetlamps?!
  • 14 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 12 hours The Balkans Are Coming Apart at the Seams Again
  • 1 min U.S. Shale Oil Debt: Deep the Denial
  • 9 hours The Dirt on Clean Electric Cars
  • 10 hours Uber IPO Proposals Value Company at $120 Billion
  • 12 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 12 mins 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 20 hours Petrol versus EV
  • 15 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 17 hours 10 Incredible Facts about U.S. LNG
Alt Text

Oil Market Loses Its Bullish Edge

Bullish sentiment has dominated oil…

Alt Text

Carbon Pricing Won't Kill Big Oil

Big oil has agreed to…

Alt Text

OPEC Turns On The Taps To Counter Iranian Outages

OPEC reported a collapse in…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Goldman: Trade War Won't Crash Oil Prices

pipeine

In spite of the ongoing—and worsening—trade spat between the United States and China, Goldman Sachs has maintained its price forecast for West Texas Intermediate at US$70 for this year, CNBC reports, citing commodities head Jeffrey Currie.

Despite a string of weekly losses for WTI clearly linked to the escalation between the United States and China, Currie believes that global economic growth will support higher average prices for the year.

"When we look at the fundamental picture, it really hasn't changed. You've seen substantial liquidation, really off of the headline risk around tariffs, but the underlying fundamental story and the case for owning commodities, as well as oil, really remains intact,” Currie said.

In support of Currie’s sentiment, China stopped short of imposing import tariffs on U.S. crude oil, which some saw as a way of keeping the oil card on the table for future use. Others, like Currie, interpreted it as the only move that makes sense under the current circumstances.

“The reason why is it can be redirected,” he told CNBC. “You're not going to impact oil because there's so many producers, so many consumers."

China is hardly the most replaceable importer of oil for any exporter, including the United States, given the amount of crude it takes in. Chances are that U.S. producers would find it challenging to quickly find new markets for the over half a million barrels daily they sold to China in June. Yet with the Iran sanctions, the challenge may not be as great as it would have been otherwise.

But it seems that for Currie, the most important factor is demand. Demand is strong, according to him, and this could even lead to a shortage given the decline in global inventories and the fact that Saudi Arabia has not ramped up supply as quickly as it was expected.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment
  • Kr55 on August 10 2018 said:
    It's a new age where governments know how to throw money at their problems. As long as all the large economic drivers are tossing money and devaluing their currencies at the same time, unsustainable growth can be sustained.
  • Mamdouh G Salameh on August 10 2018 said:
    On the contrary, oil prices are projected to surge above $80 a barrel this year despite the recent decline. My justification is that despite the escalating trade war between the United States and China, nothing has changed in the fundamentals of the global oil economy to warrant otherwise. They are still positive enough to support an oil price above $80.

    If the escalating US tariffs start to seriously hamper China’s exports to the US, China could easily switch to other markets around the globe. China’s economy is far more integrated in the global trade system than the US economy and also bigger by 24%. Therefore, tariffs or no tariffs, the Chinese economy needs a huge amounts of oil to keep functioning.

    China’s insatiable thirst for oil is underpinned by two major factors: a fast-growing economy and a declining domestic oil production.

    China’s oil imports are projected to top 10 mbd in 2018 driven by a very healthy economic growth for a mature economy projected at 6.7% this year and declining oil production from China’s two largest oilfileds: Daqing and Shengli.

    Whilst China’s oil production is projected to decline to 3.85 million barrels a day (mbd) in 2018, its dependence on oil imports is projected to account for 73% of its oil needs this year rising to 76% in 2020 and 80% by 2025.

    China will remain the most influential driver of the global economy for the foreseeable future. Oil demand from China not only will underpin global demand but also oil prices.

    President Trump’s discredited “America First” policy has antagonized both trade allies and rivals with nothing to show for the US economy. It is hoped he will soon see the error of his ways.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Neil Dusseault on August 10 2018 said:
    Is anyone from Goldman Sachs going to pay my gas bill at the pump?
    I didn't think so...

    This non-stop bullish sentiment from them needs to stop.
    Now, you can look at the fundamentals, perform technical analysis, consider geopolitical and even weather information, but let's be honest:
    They will say whatever they can say to keep oil up because they're long on oil futures.
    As of late, most headlines throw around the same recycled moniker "Oil up on renewed sanctions on Iran".

    The actual bottom line results in two factors if prices do rise--producers will be happy, but consumers won't be. I wonder which of those two overpopulates the other...

    So, if you are bullish on oil, then you're speculating a rise by however much which calculates a profit of whatever if prices do reach that target. Have you at least considered then, as a market participant, that you can get the same amount of profit AND make consumers happy AND "stick-it" to OPEC by calling their bluff by shorting the market instead?

    All you need is movement...and just remember that this time last year prices on WTI were $20-$25/bbl cheaper.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News