Goldman Sachs adjusts its forecast for oil demand upwards

Goldman Sachs revised upward its forecast for global oil demand for this year, but kept its 12-month Brent crude price forecast at $93 a barrel, as increased inventories offset the support demand received from ebbing pessimism about the growth outlook.

Goldman Sachs analysts estimated a jump in global oil demand to an all-time high of 102.8 million barrels per day in July, and expect stronger demand to lead to a bigger-than-expected deficit of 1.8 million barrels per day in the second half of this year and 0. 6 million barrels per day in 2024.

Analysts wrote in a note that declining recessionary risks and a strong effort by the Organization of the Petroleum Exporting Countries (OPEC) to increase price support supports Goldman’s expectations of higher oil prices and lower volatility.

On Monday, oil prices approached the highest level in three months and were heading for the largest monthly gain in more than a year, amid expectations that Saudi Arabia will extend a voluntary cut in production in September and global supply scarcity.

Goldman analysts said Saudi supply cuts have restored the deficit, adding that they expect the additional Saudi cuts of 1 million barrels per day (bpd) to continue in September and halve from October.