Goldman Sachs Warns Of An Imminent Oil Supply Shortage
02.09.2023 By TankTerminals.com - NEWS

February 9, 2022 [OilPrice.com] – Crude oil could soon swing into a deficit that will make next year a difficult one, Goldman Sachs said, as spare production capacity dwindles and underinvestment threatens future supply.

 

Speaking on the sidelines of an event in Saudi Arabia, Goldman’s top commodity analyst Jeffrey Currie said, as quoted by Bloomberg, that the industry is not spending enough to secure future production and that spare capacity globally is declining.

This could tip the oil market into a serious supply problem next year, but the price for a barrel of Brent could top $100 before then.

According to Currie, rising demand from China and sanctions on Russian oil will contribute to the deficit, which he expects to manifest in the second quarter of this year. In response, producers will tap their spare capacity, leaving it lower than it was before. Eventually, this will lead to a serious imbalance between supply and demand.

“Right now, we’re still balanced to a surplus because China has still yet to fully rebound,” Currie told Bloomberg. “Are we going to run out of spare production capacity? Potentially by 2024 you start to have a serious problem.”

Saudi Arabia’s energy minister has echoed the concern about insufficient spending on future oil production. In fact, Abdulaziz bin Salman has been warning about that for more than a year, and he did so again this weekend.

“All of those so-called sanctions, embargoes, lack of investments, they will convolute into one thing and one thing only, a lack of energy supplies of all kinds when they are most needed,” he said.

Brent crude has been trading at between $75 and $80 a barrel for most of the year so far but Goldman, along with other investment banks, believes it has higher to go. According to Currie, the oil market will swing into a deficit by May.

Pro Trial: Access 11,340 Tank Terminal and Production Facilities

11,340 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Hiap Huat JV Co to Build RM100m Liquid Bulk Storage Terminal in West Port Over Five Year Period
06.21.2024 - NEWS
June 21, 2024 [New Straits Times]- Hiap Huat Holdings Bhd’s joint venture company with KL P... Read More
Madrid-Based Company FRV Announces Plans to Develop Green Hydrogen Project in Brazil
06.21.2024 - NEWS
June 21, 2024 [Bioenergy Times]- FRV, a renewable energy development company based in Madrid and ... Read More
China's Wison New Energies to Quit Russian Projects in Blow to Arctic LNG 2
06.21.2024 - NEWS
June 21, 2024 [Reuters]- Chinese engineering firm Wison New Energies has decided to discontinue a... Read More
TotalEnergies, NNPC Take FID on New Gas Project to Supply Nigeria LNG Plant
06.21.2024 - NEWS
June 21, 2024 [LNG Prime]- France’s TotalEnergies and Nigeria’s NNPC have taken the final inv... Read More