Goldman Sachs expects oil prices to surge to nearly $140 a barrel this summer — but it will feel like $160 (Summer Gas price to Increase by 33%?)

MarketWatch Business Insider ^ | June 7, 2022 | Joseph Adinolfi

[Mount Athos]

Consumers desperate for relief from the scourge of sky-high gasoline prices won’t get it soon.

In an update to their outlook for oil prices over the next 12-18 months, the team at Goldman warned that they now expect oil prices to rise to nearly $140 a barrel as early as this summer.

But to American consumers, it will feel more like oil is trading at $160 a barrel as limited capacity at the refineries that process crude into petroleum products like gasoline and jet fuel continue to struggle to ramp up their processing capacity swiftly enough to satisfy growing demand.

The price of oil has already surged more than 50% so far this year, driving the average price of gas in the U.S. to a record of nearly $5 a gallon, according to AAA. On Tuesday, the international and U.S. crude oil benchmarks — were trading near $120 a barrel.

And although the longest global oil supply deficit on record ended in April after nearly two years, the Goldman team expects a resurgence in Chinese demand will more than offset the surprising durability of Russian crude exports.

While OPEC+ agreed during its June meeting to boost production, Currie writes that members’ ability to aggressively accelerate drilling faces several challenges. One is that drilling activity has languished at half of its level from the first quarter of 2020 for the past 18 months, and any surge in production would likely take months to implement.

Another is the lack of an exemption for Russia from its OPEC+ quota at the June meeting.

As MarketWatch reported earlier this month, the lack of sufficient spare capacity represents a binding constraint for OPEC+ members trying to pick up the slack as Europe turns away from Russian crude.

[Sequoyah101]

the dems do not appear the leat bit concerned. I expect you are right, the election is already cooked.

[Sequoyah101]

There will still be idiots on the road but I’ll bet a lot less of them and not many at all out for a joy ride.

[gattaca]

5.25 here in Northern Indiana.

[entropy12]

Let’s go Brandon!!

[Sequoyah101]

This is forcing the change to EV but at the cost of destruction of the entire economy.

It is interesting to me how people have more knee jerk to growing OPEX than they do the CAPEX to what they think will remedy the OPEX.

As for EV equipment, it does not generally exist and is not planned. Where does the powerline to charge equipment on a road building project come from?

There is no amount of money in the world at hand to replace the fleet in any time.

We are in a very fast and tightening downward spiral the likes of which we have not seen in several life times.

[tomd2]

OBiden will mandate gasoline be sold by Liter to conform with international standard. $3/ltr price propaganda media will claim OBiden cut the price at the pump. LOL