Goldman Sachs says global oil reserves release “a drop in the ocean” Reuters

© Reuters. In this photo taken by Kyodo News, a bird’s eye view shows an oil plant of Idemitsu Kosan in Haraichi, East Tokyo, Japan on November 12, 2021. The picture was taken on November 12, 2021.Mandatory Credit Union/From Reuters

Author: Florence Tan

Singapore (Reuters)-Goldman Sachs analysts said that the coordinated release of government oil reserves led by the United States may increase the supply of crude oil by approximately 70 to 80 million barrels, which is lower than the market-priced 100 million barrels of saxophone (NYSE:). .

The bank said in a report entitled “A drop in the ocean”: “According to our pricing model, such a release value will be less than $2/barrel, which is much lower than the $8/barrel sell-off that has occurred since the end of October.” The date is: November 23.

After the United States and other consumer countries released oil from the Strategic Petroleum Reserve (SPR) in an attempt to cool the market that did not meet some expectations, global oil prices rebounded to a one-week high on Tuesday.

On Wednesday, at 0031 GMT, the price of West Texas Intermediate crude oil fell 35 cents to $78.15 per barrel.

“About 70-80 mb (million barrels) of total release is less than the market-priced 100+ mb. The swap nature of most of the barrels means that it is even smaller, about 40 million barrels net. Oil supply will be available during 2022-23. Increase,” Goldman Sachs said.

“This is done in the context of the current market as high as 2mb/d.”

Goldman Sachs said that due to the impact of COVID-19 on Europe and China, oil prices also expect global oil demand to decrease by an additional 1.5 million barrels per day in the next three months.

The bank said: “We think these may be excessive worries over the next three months. Due to the decrease in trading activities at the end of the year, the recent sell-off has exceeded the fundamentals.”

Although the coordinated government inventory release will ensure that the bank will lower its Brent crude oil price forecast to $2 per barrel at the end of the year, it expects that negotiations with Iran will lack progress to offset the risk.

The global powers and Iran will meet on Monday to restart negotiations on the nuclear agreement, which may lift US sanctions on Iranian oil and allow Tehran to increase exports.

“In addition, OPEC can consider stopping production increases to offset the adverse impact of the drop in oil prices on the required recovery of global oil capital expenditures, which may justify cautious actions in the face of the new crown virus demand risk,” the bank said.

Disclaimer: Converged Media I would like to remind you that the data contained on this website may not be real-time or accurate. All CFDs (stocks, indices, futures) and foreign exchange prices are not provided by exchanges, but by market makers, so prices may be inaccurate and may be different from actual market prices, which means that prices are indicative and not Suitable for trading purposes. Therefore, Fusion Media is not responsible for any transaction losses that you may suffer as a result of using this data.

Converged Media Fusion Media or anyone associated with Fusion Media shall not be liable for any loss or damage caused by relying on the data, quotations, charts, and buy/sell signals contained in this website. Please fully understand the risks and costs associated with financial market transactions. This is one of the most risky forms of investment.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *