Goldman Sachs Warns Of An Imminent Oil Supply Shortage
According to Currie, rising demand from China and sanctions on Russian oil will contribute to the deficit, which he expects to manifest in the second quarter of this year. In response, producers will tap their spare capacity, leaving it lower than it was before. Eventually, this will lead to a serious imbalance between supply and demand.
Crude oil could soon swing into a deficit that will make next year a difficult one, Goldman Sachs said, as spare production capacity dwindles and underinvestment threatens future supply.
Goldman Sachs Warns Of An Imminent Oil Supply Shortage
In its latest monthly report, OPEC revealed it had yet again failed to produce as much oil as it agreed to produce the last time it discussed output. And it wasn’t by a few thousand barrels per day, either. The shortfall was some 1.8 million barrels daily, but more importantly, that sort of undershooting of its own target has become a regular thing for the cartel. Meanwhile, the United States federal government needs to buy some oil for its strategic petroleum reserve after releasing close to 200 million barrels from it this year as a way of countering fuel price inflation. Yet U.S. drillers are not in a rush to boost production. On the contrary, it seems production growth has lost its place among these companies’ top priorities.
The Era Of Cheap Oil Has Come To An End
Previously:
OPEC+ To Cut Oil Production By 2 Million Barrels Per Day
The specter of OPEC+ even considering such a large cut as global oil supplies are tight has sent the Biden Administration reeling. White House spokesman John Kirby on Wednesday said that the United States needed to be less dependent on OPEC+ and other foreign producers of oil. The White House was reportedly in a panic leading up to the meeting, trying to prevent OPEC+ from taking such a “hostile act”. In the runup to the meeting, the White House unleashed Amos Hochstein, Janet Yellen, and Brett McGurk to plead its case with the Gulf Nations. Evidence suggests the move had zero effect.
Related:
White House Disappointed With OPEC’s ‘Shortsighted’ Decision
In the meantime, the American Petroleum Institute (API) has criticized the administration’s energy policies, saying that dependence on OPEC and other foreign countries for our energy is a “choice”.
One of Biden’s top energy aides confirmed Friday the administration won’t extend the oil releases from the Strategic Petroleum Reserve that are scheduled to end this fall.
‘We can’t be an oil supplier’: Biden’s adviser says oil reserve releases must end
Related:
Soaring U.S. Production Can’t Keep LNG Prices In Check
Europe has displaced Asia as the top destination for U.S. LNG, and now receives 65% of total exports.
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According to a report by the Oil & Gas Journal, 10-year LNG contracts are currently priced at ~75% above 2021’s rates, with tight supplies expected to persist as Europe aims to boost LNG imports.
Ms. Cat’s Chronicles 
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