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Goldman Sachs revised down its Brent price forecast for this quarter to $110 a barrel, down from a previous projection of $140 per barrel, but the investment bank still believes the case for higher oil prices remains strong.
In recent weeks, oil prices have been driven down by low trading liquidity and “a mounting wall of worries,” Goldman said in a note on Sunday. Those worries include fears of recession, the SPR release in the U.S., the rebound in Russian crude oil production, and China’s snap COVID-related lockdowns, the bank’s strategists noted.
Goldman Sachs also revised down its fourth-quarter Brent price forecast to $125 a barrel from $130 per barrel previously expected. The 2023 projection, however, was left unchanged at $125 per barrel.
“We believe that the case for higher oil prices remains strong, even assuming all these negative shocks play out, with the market remaining in a larger deficit than we expected in recent months,” Goldman Sachs’s strategists wrote in the note carried by Bloomberg.
The bank has been bullish on oil all year, and it continues to be bullish on crude prices despite the cut in its near-term price forecasts.
In the middle of July, Goldman Sachs said that despite the ongoing market sell-off, “the skew to prices from here is squarely skewed to the upside.”
With low inventories and a potential Saudi/UAE ramp-up in production in the region of 500,000 barrels per day (bpd), which will further deplete “record low spare capacity,” the risks are firmly skewed to the upside, Goldman Sachs’ analysts wrote in the note in July.
In yesterday’s note, Goldman said, “We still expect that Brent prices will need to rally well above market forwards.”
Oil prices were trading at multi-month lows early on Monday, with Brent below $94 per barrel and WTI Crude just below $88 per barrel.
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Meoryou, Clearly you are correct just look at the extraordinary profits achieved in Q1 and Q2, and they didn't increase the share price very much. My money still says a strong dividend will, but respecting the need for strong profit
AUG 8th
Goldman sees strong case for higher oil prices despite negative shocks
Chittybangbang, I read earlier this week that Goldman Sachs are predicting oil price at $130 by the year end
Chittybangbang, I read earlier this week that Goldman Sachs are predicting oil price at $130 by the year end
chittybangbang lets see shall we.
demand is going to go up china will open, less gAS = more oil use.
a recession only drops oil use by 0.2%
SO demand will force brent upto $130 and stay above $100 in 2023.
Jakers ,Charlie
Normally I would say you are both wrong.
Strong profits is NORMALLY the driver for sp.
But not this time for some reason.
Maybe normally strong profits results in high div , and that is the link that has been broken
Yes dear I think your informant might be right. Source?
Oil price might have been its main determinant but it does chocolate now don't you know.
You wish, it will flap around the 100 and drop down to 80
Jakers, sort of right but after quite a long time with no divi income, it's nice to see some of the defensives rising to the occasion! Rubbish, plenty out there to play with. Such fun. Try CFH?
Yes I wondered that.
What makes you think that?
brent will be $130 soon again though and will stay above $100 for 18 months
Charlie156, Obviously we all aspire to having the share price at least at or preferably above what we paid for them. I have always held the opinion that a strong dividend is the primary driver of the share price
Jakers
I always thought the oil price was the main determinant of BP's share price, but the average price for the buyback on July 14 was £3.668, when Brent was over $102 a barrel. Today, with the dividend, the buyback was £4.325, with Brent at $99. Go figure
That’s a successful result ex div a rise in sp and slightly lower buyback volume
BP p.l.c. (the "Company") announces that on 11 August 2022 it has purchased, in accordance with the authority granted by shareholders at the 2022 Annual General Meeting of the Company, a total of 10,903,807 of its ordinary shares of $0.25 each ("Shares") on the London Stock Exchange and Cboe (UK) as part of the buyback programme announced on 2 August 2022 (the "Programme") and as detailed below:
Highest price paid per Share (pence): 428.00
Lowest price paid per Share (pence): 417.55
Volume weighted average price paid per Share (pence): 425.7529