Gas prices are going crazy! Goldman sachs: More! A new round of price adjustment is coming, 600 yuan for a tank of oil?

As of June 10, WTI crude futures closed at $120.47 a barrel, up nearly 30% around $93 a barrel in early April, while Brent crude briefly touched $124 a barrel.

Notably, despite the surge in crude oil prices, Goldman sachs said energy prices would need to climb further to cut consumer demand, raising its oil price target further to $140 a barrel.

With oil prices soaring, several institutions forecast that gasoline 95 will break the 10 yuan mark in a new round of price adjustment next Tuesday, hitting a new record high. In addition, the stock market also presents the linkage phenomenon. In the past three trading days, oil-related industries rose 5.48%, China National Offshore Oil (CNOOC) A shares hit A new high, sinopec, petrochina other companies surged.

With oil at $120 again, Goldman sachs is bullish again

As the king of commodities, fluctuations in the price of crude oil have a huge impact.

Over the past two months, international oil prices have come off a strong rally, up 30%, around $93 below Z. WTI crude hit a high of $123.18 a litre on June 8, just shy of the $130 it hit in early March. By the end of June 10, WTI crude futures hit an intraday high of $122.75 closed at $120.47 a barrel. Brent crude hit as high as $124 a barrel.

It is worth noting that affected by the rise in crude oil prices, 92 gasoline in some parts of The country has exceeded 9 yuan/liter for the first time. A number of institutions are predicting that the new round of price adjustment will be launched on June 14, gasoline 95 will break through the 10 yuan mark, hitting a new record high. This means that ordinary fuel car if 60 liters of fuel tank, add a box of 95 oil will need 600 yuan, car costs rise straight line.

To make matters worse, Goldman Sachs recently raised its oil price target again. Brent crude is expected to trade at $140 / BBL in Q3 $130 / BBL in Q4, compared with previous estimates of $125 / BBL. $130 / BBL in the first quarter of 2023, compared with the previous forecast of $115 / BBL. Goldman sachs notes that Chinese demand is recovering is expected to grow strongly this year.

DamienCourvalin, senior commodity strategist head of energy research at Goldman sachs group inc., said Friday that energy prices need to climb further before americans start cutting back on consumption. "Prices are high enough to reduce demand growth."

Morgan Stanley still has a third-quarter brent base forecast of $130 / BBL, compared with a bullish forecast of $150 / BBL. Jeremy Vere, CEO of oil trading giant Trafigura, said oil could hit $150 a barrel in the next few months.

The United Arab Emirates, a leading member of the OPEC+ oil producers' group, also said oil prices were "far their peak" as resurgent Chinese demand threatened to strain already tight global markets.

Behind high oil prices: Consumption is strong supply remains tight

New data the Us Energy Information Administration also showed us gasoline demand rose to its highest level this year despite record fuel prices, but was about 1 per cent lower than the same period last year almost 6 per cent lower than the same period in 2019.

Although demand for crude oil is strong, the essence of the high oil price is tight supply.

At the 29th OPEC ministerial meeting, OPEC producers decided to raise monthly production to 648,000 barrels per day for July August, up 432,000 barrels per day previously planned. Despite the stronger-than-expected increase, concerns about tight supply remain as OPEC members have little spare capacity left production increases in recent months have fallen short.

In May 2022, OPEC+ production increased 120,000 b/d month-on-month, 2.616 million b/d below target, the implementation rate was 182.5%. The 13 OPEC members produced 28.62 million BPD in May, down 180,000 BPD the previous month.

Goldman sachs believes global supply demand conditions will deteriorate, with the supply deficit likely to widen further than before, with global inventories now 75 million barrels lower than before. Goldman sachs estimates that the June 22 deficit was close to 600,000 b/d (at current spot prices), a new deficit that will keep inventories spare capacity in the global oil market at record low levels for months to come.

Citic Construction investment futures also pointed out that the supply demand pattern of crude oil is still strong, on Thursday refined oil rose again more than crude oil, Europe the United States refined oil cracking spread higher. Terminal consumption data is still in the uptrend period, to maintain shock more ideas.

However, the World Bank cut its forecast for global growth this year to 2.9 percent, warning of "stagflation" risks. The IMF is expected to further cut its 2022 global growth forecast next month, its third such cut this year, a spokesman said. Clearly, the negative factors of high oil prices are also accumulating.

Oil sector rose, Cnooc A shares hit A new high

In the context of rising oil prices, oil-related stocks in the A-share market surged last week, showing the linkage effect of futures.

Data show that in the past three trading days, the oil industry surged 5.48%, ranking third in all A sectors, only after the coal industry fertilizer industry. Individual stocks, Cnooc A shares hit A new high, A+H total market value approaching 1 trillion mark. Petrochina hit a three-month high, Sinopec hit a four-month high Guangju Energy rose by the daily limit for two consecutive times.

Many people think that oil stocks are the right investment opportunities at the moment, the most astute of them all should be Warren Buffett.

Berkshire bought Chevron as early as the third quarter of last year, increased its position significantly in the first quarter to $26 billion, its fourth-largest holding. Buffett also piled into Occidental oil in the first quarter, placing him sixth with a market value of about $13.2 billion. Berkshire's oil holdings now exceed $40 billion, 11% of its total holdings.

Cinda Securities believes that the demand for crude oil is still growing, the world will continue to face the problem of crude oil shortage for many years. In 2022, the international oil price will usher in an upward inflection point, in the medium long term, the oil price will remain high for a long time. In the next 3-5 years, energy resources are expected to be in an upward cycle. Continue to firmly optimistic about crude oil other energy resources in the production cycle of historic allocation opportunities.

However, Citic Jiantou Securities in the second half of the forecast, crude oil prices will fall shock. It is expected that the demand for crude oil will decline rapidly with the global economic slowdown, but the war geopolitical factors are more uncertain, the oil price is expected to fall in shock if the war between Russia Ukraine does spill over.

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Source: Brokerage China