Sachs has forecast crude
hit $100 in 2023 as demand growth outpaces supply growth.
insufficient supply in the face of strong demand," said Damien
Courvalin, head of energy research at the investment bank, earlier
Bloomberg. "Oil prices have to be higher to overcome the higher
cost of capital to fund projects."
so, Goldman's current price forecast for Brent crude for 2022 and
2023 is $85 per barrel. The upside risks for triple-digit prices
include cost inflation for drillers and a potential supply shortfall.
Shrinking access to funding for new oil and gas projects is also a
risk as lenders focus on ESG-aligned industries and projects.
to Goldman's analysts, the recent drop in oil prices—fuelled by
fears about the latest coronavirus variant—was an overreaction.
Courvalin noted it was equal to the demand loss of 5 million bpd over
the next three months.
demand for everything oil-related, from fuels to plastics, is on a
strong rebound, Courvalin also noted. Consumption is likely to break
records in 2022 and 2023 as government spending on economic recovery
and the energy transition continues to support demand.
has become the second bank this month to maintain its bullish stance
on oil despite the recent dip. Earlier, JP Morgan brushed off Omicron
will see the end of the pandemic and forecasting oil prices could hit
$125 per barrel next year and $150 per barrel in 2023.
investment bank cited OPEC's limited spare capacity that would, in
turn, limit its ability to react to stronger demand by boosting
production and "a more vibrant economic cycle."
we see clear potential for a more vibrant economic cycle, the
environment is also fraught with cross-currents. We are confident the
economic expansion will continue through 2022, but its strength will
likely be determined by the monetary response to inflation, the
relative success of Chinese policymakers in rebalancing their
economy, and the pace of the transition from a pandemic to an endemic
disease," JO Morgan's analysts noted.