Goldman Sachs Projects Slower Oil Demand Beyond 2025
April 16, 2021
There has been a lot of good economic news offering support to the bullish sentiment. Core US retail sales (less auto and gas) rose 8.2% in March from February, which was much higher than the 4.4% rise expected by economist. US jobless claims came in at just 576,000 claims for the week ending April 3rd, this was much lower than the 695,000 expected. The Philadelphia Fed and Empire State manufacturing indexes reported yesterday came in much higher than expected for March as well. This helped support equities and oil prices. Several agency have also increased their outlooks for energy demand in the last couple weeks. A lot of positive news has come out recently but so far, the energy bulls have not been able to break this market out of its ranges on the upside. They likely will get the market to test higher in the near term. Much of this positive data has been the result of stimulus payments and the fact that some of those payments did not arrive until late in the month of March has the outlook for April to be good as well.
Goldman Sachs said it remains above consensus on oil demand forecast through 2025 and doesn’t not forecast peak oil demand this decade. It expects oil demand growth beyond 2025 to be slow, mainly due to electrification.
China, the world’s second largest economy grew at 18.3% in the first quarter. Retail sales surges 34.2% in March. This is more positive news for the market bulls looking for stronger energy demand.
The US dollar index continues to be under selling pressure and moving lower helping to support crude prices.