ICYMI yesterday post on GS views on oil:
A little more detail from that note now:
- In the coming weeks, however, we believe that the recent Brent pull-back has taken prices too low in the face of tight fundamentals and growing supply risks (Iran, Venezuela, Libya, Russia), just as refiners come back from extended spring turnarounds.
- Taking our cue from the physical markets as we did early this year, we therefore expect a near-term Brent rebound
- ... Importantly, such a tactical call simply reflects that as real assets, commodity markets must clear with today's binding tight supplies creating asymmetric upside and likely explaining oil's resilience in the face of Monday's cross asset sell-off.
Further out:
- Beyond the next couple months, however, we continue to believe that all these supply and demand crosscurrents will dissipate to bring a balanced global oil market, once new Permian transport capacity is online and core-OPEC ramps up.
- … we also discuss in this report, we expect Russia's crude issues to be transient and soon allow for higher production.
- We therefore remain comfortable with our view that oil prices will sequentially decline later this year with our 3Q19 Brent forecast of $65.5/bbl
