Goldman Sachs Group Inc. expects the oil market to face a serious supply problem in 2024 as spare production capacity runs out. The investment banking group furthermore projects that oil will rise back above $100 per barrel during the course of 2023.
Against the backdrop of sanctions against Russian oil exports, China is experiencing a rapid rebound in oil demand as the country brings an end to its Covid Zero policy. This turnaround is expected to be the main driver of price increases this year. Goldman Sachs analyst Jeff Currie noted that a lack of spending on the oil production front could also influence supply issues.
Oil prices have been hit by extreme volatility over the past few years. In 2020, oil plummeted below $20 per barrel during the height of the coronavirus pandemic. Once the Russian invasion of Ukraine got underway in 2022, oil prices skyrocketed to more than $130 per barrel.
Speaking at the OPEC+ conference in Riyadh on Saturday, Saudi energy minister Prince Abdulaziz bin Salman bemoaned the lack of investment in refining capacity that has negatively affected supply capacity.