US President Joe Biden's 180mn barrel release would help the oil market rebalance in 2022, increasing supply by 1 million b/d for six months, analysts at Goldman Sachs said in the latest note.
Key quotes
“Dropped its H2 2022 Brent forecast by $15/bbl to $120/bbl.”
“The extra supply would "not resolve the structural supply deficit, [that has taken] years in the making."
"In fact, lower prices in 2022 would support oil demand while slowing the acceleration in shale production, leaving, for now, a deficit in 2023, as well as the likely requirement to refill the SPR."
“The release, in lowering prices, would therefore lower the incentive for shale producers. This is microeconomics 101 so it should not be news to anyone.”
“Could raise its 2023 Brent oil prices $5/b above its current $110/b forecast for the year, reflecting higher demand and lower shale supply exiting 2022.”
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