U.S. manufacturing activity has declined for the…
OPEC+ members have so far…
Goldman Sachs expects higher oil prices 12 months from now, analysts from the investment bank said in a note, pointing out a forecast demand increase in China to more than 16 million barrels daily over the period.
The bank is quite bullish on all commodities: earlier this week, its head of commodities, Jeffrey Currie, said that the outflow of capital from the energy industry will result in shortages that will manifest later this year.
"Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher," Currie said at the Financial Times Commodities Global Summit, as quoted by Reuters.
Currie is not the only bullish industry observer. Also this week, hedge fund manager Pierre Andurand said oil will rebound and rise to $140 per barrel by the end of the year, noting that the current slump was speculative and came from the banking sector.
A lot of the bullishness around oil prices has to do with China. Chinese energy commodity imports were underwhelming in the first two months of 2023, but they are expected to pick up later this year with potentially record-high crude oil purchases, even though Beijing has set its lowest annual economic growth target in decades.
Average oil imports over the first two months of the year were lower than last year’s but only modestly, by 1.3%. Oil imports during January and February tend to be weaker in China because of the Lunar New Year holidays, anyway.
Yet pretty much every analyst expects Chinese demand for oil to grow in the coming months with a view to that growth rate of 5% set by the government. Besides, there is some new refining capacity coming online this year, which should guarantee stronger demand and lend a hand to prices.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.