Goldman Sachs The Markets
The impact of rising oil prices
Sep 22, 2023
The podcast discusses the impact of rising oil prices on the global economy, including upgraded forecasts and record-high global demand. It also explores the pricing power of OPEC Plus, the challenges it faces, and the impact on the US economy and inflation.
05:13
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Quick takeaways
- The rise in oil prices is primarily driven by record-high oil demand and OPEC supply cuts led by Saudi Arabia and Russia.
- Higher oil prices can lead to higher headline inflation, but the overall inflation backdrop is favorable and the rise in oil prices does not disrupt the forecast of a soft landing for the US economy.
Deep dives
Rise in Oil Prices and Drivers Behind It
International brands' crude prices have risen by about 30% since late June, reaching $95 per barrel. This increase is mainly driven by record-high oil demand this summer and an extension of OPEC supply cuts led by Saudi Arabia and Russia. Goldman Sachs' forecast has been upgraded to $100 per barrel due to expectations of lower OPEC supply, particularly from Saudi Arabia, and stronger-than-expected demand, leading to sharper draws in global oil stocks.
