Goldman Sachs warns oil market could go above $100 a barrel

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Goldman Sachs warns oil market could go above $100 a barrel

After an attack on an Abu Dhabi oil facility, the price of crude oil went to levels not seen since 2014 on Tuesday, with geopolitical tensions in focus. That was as Goldman Sachs warned that surprisingly large supply deficits could see Brent prices go above $100 a barrel next year.

The February crude for February CLG 22, delivered by West Texas Intermediate, increased by $1.11, or 1.3%, to $84.93 a barrel on the New York Mercantile Exchange after a 6.2% gain last week, its fourth weekly rise in a row, according to Dow Jones Market Data. Since October 2014, prices have hovered at the highest since October 2014.

After last week s 5.3% weekly advance, the March Brent crude BRN 00, the global benchmark, added 75 cents, or 0.9%, to trade at $87.23 a barrel on ICE Futures Europe. The price of oil was trading at levels never seen since October 2014.

Iran backed Houthi rebels from Yemen claimed responsibility for an attack on an oil facility in Abu Dhabi that killed three people on Monday and sparked a fire at the international airport of the United Arab Emirates. E. is the eighth largest oil producer, and instability in the Gulf can cause concerns of supply shortages.

Goldman Sachs set a 2023 Brent spot target of $105 a barrel in 2023, with 2022 headed for $96 a barrel.

The market is still in a surprisingly large deficit as Omicron demand hit is so small and likely briefer than Delta exc. China has a team of commodity analysts led by Damien Courvalin.

The bank sees a 500,000 barrel per day hit in the first half of 2022 as a result of strong demand in the last quarter of this year, gas-to-oil substitution and supply disappointments, which may be a big hit for Chinese demand - Goldman estimates a 500,000 barrel per day hit in the first half of 2022. The global surplus in 2Q 22 is smaller than seasonal at 0.4 mb d 400,000 barrels per day, according to Courvalin and the team.

By the summer, OECD oil inventories will be at their lowest since 2000, along with a historic drop in spare capacity from oil cartel OPEC and its partners. He said that the market would remain at critical levels, with insufficient buffers, relative to demand and supply volatilities, through 2023, at $85 bbl.

Oil remained higher after the Organization of the Petroleum Exporting Countries left its forecast for growth in oil demand unchanged at 4.2 million barrels a day, estimating total global consumption at 100.8 million barrels a day.

In March gasoline RBH 22, the energy market's price went up 1% to $2.442 a gallon, after gaining 5.2% last week. The February heating oil HOG 22, rose by 2.1% to $2.691 a gallon, up 6.1% last week.

Natural-gas futures saw their February contract NGG 22, up 0.8% to $4.296 per million British thermal units. The price of the product went up 8.8% last week.