Goldman Sachs Warns Oil Inventory Rebuild Won’t Prevent 2027 Supply Glut
Goldman Sachs Warns Oil Inventory Rebuild Won’t Prevent 2027 Supply Glut What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… The coming global race to rebuild depleted oil inventories will not be enough to offset a massive glut that’s coming to the market next year, as traffic through the Strait of Hormuz appears to be headed toward normalization, according to Goldman Sachs.
Stockpiles of crude and refined petroleum products in many parts of the world have been depleted to multi-decade lows after governments raced to release strategic stockpiles in March after the Middle East crisis trapped millions of barrels of daily crude and product flows in the Persian Gulf.
These inventories will now have to be rebuilt - a process that’s likely toput a floor under oil prices.
Strategic Petroleum Reserve (SPR) has been depleted to a 1983 low, while stocks at Cushing, the delivery point of WTI, have crumbled to operational-stress levels.
In addition, many countries, especially in Asia Pacific, are looking to build new reserve capacity to boost their energy security and never again be caught off-guard by a massive supply disruption like the one triggered by the closure of the most important oil and LNG chokepoint.
But Goldman Sachs says that all these demand-supportive factors cannot erase the major glut coming next year.
The investment bank expects the global oil surplus to be about 3 million barrels per day (bpd) next year, Samantha Dart, co-head of global commodities research at Goldman, toldBloomberg Televisionin an interview on Wednesday.
“We do expect a little over 1 million barrels a day just of SPR rebuilding globally, but still, that would leave us close to 2 million barrels a day of a surplus,” Dart added.
Other Wall Street banks have also started to predict a glut next year after the U.S.
and Iran signed a memorandum of understanding in mid-June to negotiate a peace deal.
Morgan Stanley, for example, hasslashed its oil price forecastsfor the next 18 months as it expects the reopening of the Strait of Hormuz to accelerate a new supply glut.
America Bets $50 Billion on Coal and Gas Power as Electricity Demand Soars What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… Oil Prices Plunge as U.S.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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