U.S. investment bank Goldman Sachs (GS) is forecasting that the price of Brent crude oil, the international benchmark, will rise 7.5% to $86 U.S. a barrel by year’s end.
Analysts at Goldman Sachs say record demand in oil markets is likely to drive crude prices higher in the near-term. Brent crude oil is currently trading just above $80 U.S. per barrel.
While Goldman Sachs acknowledged that U.S. crude oil production has risen significantly over the past year to 12.7 million barrels a day, the bank expects that pace of growth to slow throughout the rest of 2023.
The Group of 20 (G20) energy ministers met in India over the weekend but left without reaching consensus on the phasing out of fossil fuels.
Goldman noted that the lack of an agreement following the G20 energy ministers’ meeting shows a high level of uncertainty about long-run oil demand.
The International Energy Agency (IEA) in June forecast that global oil demand is on track to rise by 2.4 million barrels per day this year, outpacing the 2.3 million barrel per day increase in 2022.
Over the weekend, the IEA forecast that both India and China will make up two million barrels a day of demand pick-up in the second half of this year.
West Texas Intermediate (WTI) crude oil, the U.S. standard, is currently trading at $77 U.S. per barrel.
