• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 2 days "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 1 day "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 1 day "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 1 day Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 8 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 1 day The Federal Reserve and Money...Aspects which are not widely known
  • 5 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 1 day "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 1 day "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 8 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 9 days Goldman Betting on Cryptocurrencies
  • 12 days Сryptocurrency predictions
Why 2023 Is Likely To See Much Higher Oil Prices

Why 2023 Is Likely To See Much Higher Oil Prices

Wall Street is overall bullish…

The Problem With Oil And Gas Price Caps

The Problem With Oil And Gas Price Caps

The attempts so far to…

Goldman Sachs Boosts Oil Price Predictions In Bullish Update

Goldman Sachs raised its 2022 price forecast for Brent crude from $99 to $104 per barrel. The increase was driven by the OPEC+ decision to reduce output by 2 million bpd.

Although the 2-million-barrel figure is nominal and the actual output cut would be smaller, at around half that, the bank believes the physical oil market is tight enough to justify such price forecast updates.

On a quarterly basis, Goldman sees Brent trading at $110 this quarter and rising to $115 per barrel in the first quarter of 2023.

In arguably the most bullish part of Goldman’s update, the bank said that there could be a $25 upside to their Brent forecast if OPEC+ maintains its output reduction through to 2023.

Yesterday, Morgan Stanley also raised its price forecast for Brent crude, to $100 for the first quarter of 2023. According to Goldman’s latest forecast, the average for Brent next year could be $110 per barrel as a result of the cuts.

The bank’s analysts commented that such a deep cut would prompt a response from the United States and that this response would most likely be a further release of strategic reserve crude.

According to Goldman, even the International Energy Agency might join the reserve release to keep a lid on oil prices.

Some media commentators have criticized the reduction of physical supply of oil at a time when most big consumers are struggling with inflation and an already short supply of energy. Bloomberg’s Javier Blas suggested it was a mistake.

The OPEC+ camp, on the other hand, motivated the move with market circumstances, with Saudi energy minister Abdulaziz bin Salman saying he did not want to gamble with the market. The remark likely refers to recession expectations that caused oil prices to decline by about a quarter between July and September.

"The oil market's buffers (stocks and spare capacity) remain critically low, and higher prices remain the key viable, long-term solution to increased inventories in the short term and higher supply capacity medium term," Goldman analysts said.

While oil prices had cooled off slightly early on Friday morning, they were still set for the largest weekly gain since Spring.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on October 07 2022 said:
    While OPEC+’s production cut will have a limited impact on both oil prices and market supplies, the real catalysts are the tightness and bullishness of the global oil market, the continued resilience of oil demand and the fast-shrinking global oil spare production capacity including OPEC+’s. To these can be added China’s easing of lockdowns and its return to business as usual.

    Against this background, oil prices will resume their surge with Brent crude price touching $110 a barrel before the end of the year. Brent could even hit $115 if Russia halts its crude exports to countries implementing the price cap.

    The United States will neither be able to offset the OPEC+ cut from US shale oil production nor can other producers from outside OPEC+ do so either. Releasing additional 10 million barrels (mb) from the SPR will hardly register on the radar of the global oil market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News