Oil prices could remain high for the next few years as demand recovers while supply is tight, according to Goldman Sachs Head of Energy Research.
Damien Courvalin, senior commodity strategist, said market fundamentals guarantee higher prices and Brent crude banks’ forecasts are $ 85 per barrel over the next few years.
Goldman Sachs base case is Brent It will reach $ 90 per barrel by the end of the year.
The oil market is in “the longest deficit in decades,” and winter demand will continue to outpace supply, Coolbarin said. He added that growing demand but lack of upstream investment in oil supplies indicates that “high prices will continue” for at least the next year.
What’s happening in the coal market — where The price is the highest ever Supply shrank faster than demand — this is a “warning sign” for oil, Courvalin said.
Oil drilling activity has not recovered much on the supply side and demand is growing, but the market is in a “persistent deficit.”
“We face a potential multi-year deficit and significantly higher price risk,” he said.
He recognizes that the transition to cleaner energy will take a long time and that asking to stop investing in hydrocarbon supplies will only create “much higher energy prices in the next few years.” Said.
An oil pump jack, also known as a “nodding donkey”, at the Rosneft oil company’s oil field near the village of Sokolovka in the Udmurt Republic of Russia on Friday, November 20, 2020.
Andrey Rudakov | Bloomberg | Getty Images
Despite oil futures rising more than 60% this year High price for the first time in several years, Mr Coolbarin said oil producers are not increasing their supply.
“Demand is recovering further and we really need to start looking at that investment,” he said.
However, shale producers focus on returning cash to shareholders.
“That’s the key to high price sustainability,” he added, adding that he expects oil demand to hit record highs in 2022 and 2023.
“Fundamentals are really very supportive of the higher-priced view we’ve seen since 2014,” he said.
— CNBC’s Patti Domm and Pippa Stevens contributed to this report.
Goldman sees “sustainable high prices” for oil next year
Source link Goldman sees “sustainable high prices” for oil next year