Goldman Sachs cut its 2023 oil price forecast on Tuesday but remains bullish over the longer term on supply constraints
29 September 2022 - 12:24
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London — Oil prices fell on Thursday, with a stronger dollar paring the previous day’s gain of more than $3 a barrel, though losses were capped by indications that the Opec+ producer group might cut output.
Brent crude futures fell $1.18, or 1.3%, to $88.14 a barrel at 8.23am GMT and West Texas Intermediate was down $1.11, or 1.4%, to $81.04.
Both benchmarks had rebounded in the previous two sessions from nine-month lows earlier in the week, buoyed by a temporary slip in the dollar index and a larger-than-expected drawdown in the US fuel inventory.
However, the dollar index rose again on Thursday, dampening investor risk appetite and stoking recession fears.
The Bank of England said it is committed to buying as many long-dated government bonds as needed between Wednesday and October to stabilise its currency after the British government’s budget plans announced last week sent sterling tumbling.
Goldman Sachs cut its 2023 oil price forecast on Tuesday, citing expectations of weaker demand and a stronger dollar, but said global supply disappointments reinforced its long-term bullish outlook.
In China, the world’s biggest crude oil importer, travel during the coming weeklong national holiday is set to hit its lowest level in years as Beijing’s zero-Covid rules keep people at home while economic woes curb spending.
Citi economists have lowered their China GDP forecast for the fourth quarter to 4.6% growth year on year from 5% previously.
“Stringent zero-Covid measures and a weak property sector continue to cloud growth prospects,” Citi analysts wrote on Wednesday.
Leading Opec+ members have started talks about cutting crude output when they meet on October 5, two sources from the producer group said. One source said a cut looks likely, but gave no indication of the quantity.
Earlier this week Russia was reported to be likely to propose that Opec+ reduces production by about 1-million barrels a day.
Hurricane Ian also provided price support. Output amounting to about 157,706 bbl/day was shut down in the Gulf of Mexico on Wednesday, according to the Bureau of Safety and Environmental Enforcement.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Lower crude prices limited by talk of Opec+ cuts
Goldman Sachs cut its 2023 oil price forecast on Tuesday but remains bullish over the longer term on supply constraints
London — Oil prices fell on Thursday, with a stronger dollar paring the previous day’s gain of more than $3 a barrel, though losses were capped by indications that the Opec+ producer group might cut output.
Brent crude futures fell $1.18, or 1.3%, to $88.14 a barrel at 8.23am GMT and West Texas Intermediate was down $1.11, or 1.4%, to $81.04.
Both benchmarks had rebounded in the previous two sessions from nine-month lows earlier in the week, buoyed by a temporary slip in the dollar index and a larger-than-expected drawdown in the US fuel inventory.
However, the dollar index rose again on Thursday, dampening investor risk appetite and stoking recession fears.
The Bank of England said it is committed to buying as many long-dated government bonds as needed between Wednesday and October to stabilise its currency after the British government’s budget plans announced last week sent sterling tumbling.
Goldman Sachs cut its 2023 oil price forecast on Tuesday, citing expectations of weaker demand and a stronger dollar, but said global supply disappointments reinforced its long-term bullish outlook.
In China, the world’s biggest crude oil importer, travel during the coming weeklong national holiday is set to hit its lowest level in years as Beijing’s zero-Covid rules keep people at home while economic woes curb spending.
Citi economists have lowered their China GDP forecast for the fourth quarter to 4.6% growth year on year from 5% previously.
“Stringent zero-Covid measures and a weak property sector continue to cloud growth prospects,” Citi analysts wrote on Wednesday.
Leading Opec+ members have started talks about cutting crude output when they meet on October 5, two sources from the producer group said. One source said a cut looks likely, but gave no indication of the quantity.
Earlier this week Russia was reported to be likely to propose that Opec+ reduces production by about 1-million barrels a day.
Hurricane Ian also provided price support. Output amounting to about 157,706 bbl/day was shut down in the Gulf of Mexico on Wednesday, according to the Bureau of Safety and Environmental Enforcement.
Reuters
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