Investment bank Goldman Sachs has revised down its prediction for oil prices in the near future by $10, with it now expecting them to reach $100 per barrel.
The bank has been relatively bullish about oil prices, with it previously predicting that oil prices could break above $100 per barrel relatively soon and even rise above $125 next year. The main factors behind these forecasts were the expectation that the European Union’s embargo on Russian oil would curb the country’s crude oil exports, while China taking a more nuanced approach to its zero-COVID approach would lead to increased demand.
The oil market has been relatively tight this year, and while US producers like Chevron and ExxonMobil, which both make industrial fluids like hydraulic and compressor oils under the Texaco and Mobil brand, have sought to ramp up production, the overall production in the US shale patches has only grown slowly.
In its revision, Goldman cites the rising number of lockdowns in China as the country once again tackles rising cases, as well as a surge in exports of Russian crude oil ahead of the European Union’s embargo coming into force.
The Saudi-based International Energy Forum think tank predicts that the EU embargo could reduce the supply of Russian oil by 1-3 million barrels per day, leading to greater demand for oil from other sources. Combined with possible further production cuts from the OPEC+ group, this would put upward pressure on prices, but lower demand from China could limit the scale of any rally in oil prices.
