Goldman Sachs shouted again: oil prices will break $140 this summer!

Recently, after the international oil price rose to the high pressure level during the Russia-Ukraine conflict, the V-shaped reversal fell for two consecutive weeks and returned to the price level
in mid-May.
However, Goldman Sachs, the "standard-bearer of commodities", still held high the bullish banner, reiterating the view
that oil will soar to $140 this summer.

On the evening of June 27, Jeff Currie, chief commodity strategist at Goldman Sachs, said that the recent pullback in oil prices is a good opportunity to buy, and the core logic supporting its bullish oil prices is insufficient
investment.
Currie said:

"The situation in the energy sector as a whole is very optimistic
at the moment.
Ultimately, the only way to solve these problems is to increase investment
.
”

At press time, Brent crude was trading at $112.
53 a barrel, nearly 25% upside from Goldman's target price
.

1.
Europe will have to look for oil as an alternative to gas

Last week, Gazprom cut the flow of gas to Germany through the Nord Stream 1 pipeline by 60 percent
.
International energy consultancy Wood Mackenzie believes that if Russia completely stops Nord Stream 1 gas supplies, Europe will face the risk
of running out of gas stocks during the winter peak demand.

On Monday, the European Union reached an energy storage resolution that requires domestic gas storage levels to reach 80%
by winter 2022.

Currie believes that recent Russian moves to reduce Nord Stream 1 gas flows have exacerbated the turmoil in the European energy market, and Europe will have to seek alternatives to natural gas, and oil is naturally one of the
alternatives.
As a result, the upward momentum of petroleum and petroleum products is currently very high
.

As in the face of the looming energy crisis, many European countries have recently chosen to restart coal-fired power plants and leave the zero-carbon policy behind
.

German Deputy Chancellor and Economy Minister Robert Habeck said on Sunday that the country was increasing coal power generation to increase power output
.

2.
"Oil will soar to $140 this summer!" ”

On June 7, Goldman Sachs released a report predicting that the price of Brent crude oil would touch $
140 per barrel.
Damien Courvalin, head of energy research at Goldman Sachs, mentioned in the research report that the structural shortage of crude oil has not been solved, and oil prices need to rise further to eventually normalize
inventories.

Further, Courvalin summarized the following four factors that support the rise in oil prices:

The brief inventory surplus has ended due to the continued recovery of Chinese demand and production cuts in Russia;

Global crude oil demand remains resilient at high oil prices, with strong growth in crude oil demand and demand destruction just beginning;

Crude oil supply from all parties is slow to respond to prices, and it is difficult to increase supply;

Structural shortages remain unresolved, and the exacerbation of chronic shortages requires a near-term surplus
.