Goldman Sachs slashes its Brent price forecast on Biden’s oil reserve release

Dhwani Mehta FXStreet

US President Joe Biden's 180M barrel release would help the oil market rebalance in 2022, increasing supply by 1 million b/d for six months, analysts at Goldman Sachs said in the latest note.

Key quotes

“Dropped its H2 2022 Brent forecast by $15/bbl to $120/bbl.”

“The extra supply would "not resolve the structural supply deficit, [that has taken] years in the making."

"In fact, lower prices in 2022 would support oil demand while slowing the acceleration in shale production, leaving, for now, a deficit in 2023, as well as the likely requirement to refill the SPR."

“The release, in lowering prices, would therefore lower the incentive for shale producers. This is microeconomics 101 so it should not be news to anyone.”

“Could raise its 2023 Brent oil prices $5/b above its current $110/b forecast for the year, reflecting higher demand and lower shale supply exiting 2022.”

Related reads

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD stays defensive near 1.3450 amid Mideast uncertainty

GBP/USD drifts lower to near 1.3460 in European trading on Thursday. Conflicting rhetoric from US and Iranian officials about a potential deal fuels market concerns, allowing the US Dollar to attract some haven demand. Next of note for the major is the US Initial Jobless Claims report, while Mideast headlines will remain in play.

EUR/USD turns lower toward 1.1500 as USD finds demand

EUR/USD is turning south toward 1.1500 in the European session on Thursday, pressured by a modest US Dollar rebound. Markets stay wary about the prospects of a US-Iran peace deal and the reopening of the Strait of Hormuz, keeping the safe-haven USD underpinned. The focus is now on the US Jobless Claims data, following weak Eurozone Retail Sales report.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

Top Altcoins: Ripple, Cardano, and Solana vulnerable to deeper losses

Ripple, Cardano, and Solana are trading in the red on Thursday, facing downside pressure. The technical outlook for altcoins is bearish, as XRP risks falling below $1.00, ADA is eyeing the 50-day Exponential Moving Average at $0.1766, and SOL remains capped below a cluster of resistance levels.

AI defies the disinflationary playbook: Why lower oil prices might not be enough to cool core inflation

The global economic landscape has been fixated on the Middle East since the US-Iran war started in late February, reacting to significant changes in crude Oil prices and assessing how they could influence inflation dynamics and growth outlook.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.