Energy News Today

Just a speed bump? Oil has taken a dive, but Goldman is still bullish


Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas.

Nick Oxford | Reuters

A panic-induced sell-off in the oil market triggered by virus concerns has thrown the commodity’s upward march into question — but energy experts at Goldman Sachs don’t appear to be rattled.

Fears over the surging delta coronavirus variant and a fresh supply boost agreement from OPEC+ sent oil prices tumbling down more than 7% as the trading week opened Monday.

The drop was the steepest since March, a rude awakening for oil bulls who’d been enjoying the commodities’ highest prices in 2½ years.

International benchmark Brent crude was trading at $68.42 a barrel at 2:15 p.m. in London on Tuesday, down just over 7% from its Friday close of $73.59 a barrel. 

Oil analysts were quick to stress the uncertain road ahead for demand as new waves of Covid-19 infections ― many among communities that have high vaccination rates ― threaten the recent months of economic recovery.

“The market is clearly unsettled about the demand outlook. And rightly so. The rise in delta variant cases is raising questions about the sustainability of demand,” Stephen Brennock, a senior analyst at PVM Oil Associates in London, wrote in a research note Tuesday entitled “Oil takes a beating.”

But analysts at Goldman Sachs led by Senior Commodity Strategist Damien Courvalin see the current setback as merely a speedbump, with little concrete reason for oil bulls to be worried.

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Just a speed bump? Oil has taken a dive, but Goldman is still bullish

2021-07-20 09:32:16

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