Oil Prices Surge as Goldman Sachs Reports Supply Deficit

Photo: Web
Oil Prices Surge as Goldman Sachs Reports Supply Deficit
Global crude benchmarks are trading at six-month highs after Goldman Sachs analysts said the market is now in supply shortage.

Brent crude prices grew to nearly $49 per barrel during Monday’s trading. West Texas Intermediate soared to over $47 per barrel, their highest level since November.

“The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected,” Goldman said.

“The market likely shifted into deficit in May, driven by both sustained strong demand as well as sharply declining production,” the bank added.

That prompted the bank to raise its US crude price forecast to $50 a barrel for the second half of 2016 from a $45-estimate in March.

The biggest contributor to Goldman-reported supply shortage was wildfires in Canada’s Alberta Province. Among other significant shortfalls are in Nigeria, where militant attacks on oil facilities have squeezed crude exports.

In the US, oil production has contracted to 8.8 million barrels per day (pbd), 8.4 percent down from 2015 peaks, as the country’s crude sector is suffering from low prices.

Supply shortfalls around the world have totaled 3.75 million bpd, wiping the glut that slashed oil prices from $114 per barrel in 2014 to $28 this January, according to Goldman.

The bank has warned the 258-403 million bpd surplus could return in the first half of 2017.

At the same time, OPEC countries continue their struggle for market share, having pumped 32.44 million bpd in April, a 188,000-bpd increase from March.

Global oil reserves are also preventing a full price recovery, according to analysts.

“The inventory buffer may be preventing full price recovery and the market is rightly nervous about the sustainability of outages,” said Morgan Stanley, as quoted by Reuters.


Click to add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *


More in Economy

Venezuela’s Cryptocurrency Set to Avoid Financial Attacks

December 29, 2017

China Offers Tax Break to Keep Investors after US Overhaul

December 29, 2017

Barbados Private Sector Chalks Up 2017 as a Year of Govt Failure

December 29, 2017

U.S. Is Becoming the World’s New Tax Haven

December 29, 2017

Help Pours In For Dominica

December 29, 2017

Argentine State Workers Announce Nationwide Strike

December 28, 2017

Puerto Rico Treated as a Foreign Country in GOP Tax Bill

December 28, 2017

Cuban Ambassador at UN Notes World Support for End to U.S. Blockade

December 28, 2017

Bitcoin Introduces to the World a ‘Technology as Revolutionary as the Internet’

December 28, 2017
You Can Advertise Here
"The other side of the news!"
Copyright © 2015 Carib Flame. Follow us on Twitter @caribflame