Goldman Sees $5 Gasoline, $130 Brent By Year End

Domestic oil and gas production has increased since President Biden came into office. PHOTO: ROBYN BECK/AGENCE FRANCE-PRESSE/GETTY IMAGES
Domestic oil and gas production has increased since President Biden came into office. PHOTO: ROBYN BECK/AGENCE FRANCE-PRESSE/GETTY IMAGES

The price of retail gasoline just dipped below $4 per gallon, AAA data showed on Thursday, but prices could rise to $5 per gallon by the end of the year, Goldman Sach’s Head of Energy Research Damien Courvalin told Bloomberg TV on Thursday.

“We think that’s the level at which we need to see sustained pricing to eventually solve the market deficit,” Courvalin told Bloomberg.

As for crude oil prices, Courvalin sees Brent climbing to $130 by the end of the year. “So we think Brent goes to $130 per barrel at the end of this year to reflect this need for sustained high prices.”

“We’re still in deficit. Despite growth slowing, prices still have work to do, and that’s higher from here.”

Goldman’s forecast assumes China’s demand for jet fuel and diesel only grows moderately from here until the end of 2023, pressured by its zero-Covid policy.

That scenario could shift, Courvalin points out. “If we’re talking half a million barrels per day of Chinese demand going back to its prior highs, just on our pricing model, that’s $15 upside per barrel to Brent prices.”

In the shorter term, Courvalin sees gasoline and diesel prices going up as refiners head into turnaround season due to the lack of a typical inventory buffer that is currently not present in the market.

As of the latest EIA data, total motor gasoline inventories in the United States were 6% below the five-year average for this time of year, while distillate fuels were 24% below the five-year average.

Brent crude was on the upswing on Thursday, trading $2.38 (2.44%) higher on the day at $99.78, pressing to reclaim its position above $100 per barrel—a position the international crude oil benchmark has held for most of the summer.

By Julianne Geiger for Oilprice.com

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Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.