The increase in the price of oil experienced in recent months could reach record levels in 2022 and extend until 2023. Crude oil could even reach the $ 110 per barrel if the increase in supply is too slow and fails to keep up with strong demand.
Goldman Sachs forecasts draw a scenario for 2022 in which the price of a barrel of Brent will be around $ 85. A figure that in 2023 could reach three digits as a result of higher cost inflation for drillers. The investment bank is also considering the possibility of an unexpected event that increases demand.
Although prices have risen more than 40% this year, the US investment bank says they are optimistic about oil. In relation to recent sales, Goldman Sachs believes that the arrival of the omicron unnecessarily raised alarms and hopes that investors buy the dip once asset managers reallocate money next year.
As Goldman Sachs head of energy research Damien Courvalin points out to Bloomberg, “the supply is insufficient against the strong demand”. To reach equilibrium, oil prices must rise in such a way that they exceed the cost of capital required to finance so many extraction projects.
In the long term, among the challenges that oil production will have to face, highlights increasingly expensive financing, a direct consequence of the weight that ESG criteria (sustainability, environmental and good governance criteria) are acquiring. Likewise, investors are increasingly reluctant to invest in long-cycle oil projects due to the possible impact of the energy transition on fossil fuels.
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