Experts warn to imminent oil supply crunch

Experts warn to imminent oil supply crunch

Brent crude has been trading at between $75 and $80 a barrel for most of the year so far but Goldman, along with other investment banks, believes it has higher to go.

As world’s spare oil production capacity shrinks and underinvestment threatens future supply amid rising demand from China and persistent sanctions on Russian oil, crude oil supply could soon swing into a deficit, Goldman Sachs said.

Goldman’s top commodity analyst Jeffrey Currie’s warning of the impending supply crunch echoes the views expressed by the International Energy Agency and Saudi Aramco CEO recently.

The latest oil market report from the IEA expects oil supply growth to slow to one million barrels per day. It forecasts global oil demand will increase by 1.9 million barrels per day in 2023 to reach a record 101.7 million barrels per day — with nearly half of that coming from China.

Amin Nasser, CEO of Aramco, which pumps about 10 per cent of the world’s crude oil supply, fears the world won’t have enough spare capacity to deal with an imminent shift in current market dynamics.

“For crude oil, we are in a situation where there is a spare capacity that is helping to mitigate interruptions,” Nasser was as saying