June 07, 2022 / 12:15 PM IST
Goldman says Oil needs to rally further to solve market deficit:
Oil prices are likely to extend gains as global crude stockpiles need to be rebuilt in the face of rebounding Chinese demand and reduced production from Russia, according to Goldman Sachs Group Inc.
Brent crude will need to average $135 a barrel in the 12 months from July, up $10 from the bank’s previous forecast, for global inventories to normalize by late 2023, analysts including Damien Courvalin and Jeffrey Currie said in a note dated June 6. The global benchmark was trading at about $120 on Tuesday, and has risen more than 50% this year.
Recovering demand after the pandemic and sanctions on Russia over its invasion of Ukraine, which disrupted global flows of energy, lifted oil prices and led nations to tap strategic reserves to ease the pain on consumers. Yet commodities are continuing to rally and further demand destruction is needed to rebalance the market next year along with a slowdown in global growth and increased production from OPEC members including Saudi Arabia and Iran, according to Goldman.
Read More: Market Live Updates: Sensex falls more than 650pts, Nifty below 16,400; ONGC, Coal India,