• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days They pay YOU to TAKE Natural Gas
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 2 days What fool thought this was a good idea...
  • 5 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 10 mins A question...
  • 11 days The United States produced more crude oil than any nation, at any time.
Oil, Gas Activity in U.S. Holds Steady

Oil, Gas Activity in U.S. Holds Steady

The total number of active…

A Green Way to Play 2024’s Bitcoin Boom

A Green Way to Play 2024’s Bitcoin Boom

Experts predict the 4th Halving…

Goldman Sees Oil Price Spike In 2024 As Spare Capacity Runs Thin

Events in China, not Russia, drove oil prices this past year, and now that Chinese manufacturing activity is on the upswing, the next 12-18 months are likely to see another spike in oil prices, says Goldman Sachs. 

That could mean crude oil targeting prices above $100 per barrel in the fourth quarter of this year. 

The situation is “tighter” today, Jeff Currie, global head of commodities research at Goldman Sachs, told Bloomberg Surveillance Early Edition on Wednesday.  

The big event last year was not Russia. It was China. 

“Global oil demand contracted 2% in the fourth quarter of last year, and that’s a recession in my book,” Currie said. That contraction, said Currie, created the spare capacity in oil and other commodities, but manufacturing data coming out of China this morning shows that is now reversing.  

The Chinese manufacturing purchasing managers’ index (PMI) jumped to 52.6 in February from 50.1 in January, data from China’s National Bureau of Statistics showed on Wednesday. The surge in factory activity was the fastest in over a decade. Additionally, the index for non-manufacturing sectors also jumped, signaling an overall expansion of the Chinese economy in February. Altogether, it signals the potential for a faster-than-expected rebound after the reopening from the ‘zero-Covid’ policies abandoned by Beijing just at the end of 2022. 

“We created new supply, not through investment, but through China contracting, through lockdowns. Now, as China comes back, we’re gonna lose that spare capacity and we’re gonna be back to the same problems we had before,” Currie warns. The real focus, according to Goldman, is supply scarcity. 

“At this point, the ability to get from one year to the next given how scarce supply is, is really the focus. And the markets have been trading that way,” Currie said, noting that a commodities supercycle is not an “upward trend”; rather, it is a “sequence of spikes”. 


“We’re coming off the backside of one spike. He’s confident we’ll see another spike in the next 12-18 months,” he said.  

By Tom Kool for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on March 01 2023 said:
    Price of tea in China got it.

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