Fuel prices poised to increase worldwide, Goldman analysts
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Fuel prices poised to raise over diminishing oil inventories worldwide according to Goldman analysts
Fuel prices poised to increase over diminishing oil inventories worldwide according to Goldman analysts.
Goldman Sachs on Sunday revised up its global oil demand forecast for the year while sticking to its 12-month Brent price projection of $93 per barrel as higher realized inventories offset the demand boost from a less pessimistic growth outlook.
The Goldman analysts estimate global oil demand climbed to an all-time high of 102.8 million barrels per day (bpd) in July and see solid demand driving a larger-than-expected 1.8 million bpd deficit in the second half this year and a 0.6 million bpd deficit in 2024.
The diminishing inventories are creating an imbalance in the law of supply and demand.
In some states, the demand for crude oil has already surpassed supply, creating a shortage.
A reduced recession risk and a strong effort by the Organization of the Petroleum Exporting Countries (OPEC) to push up fuel prices support Goldman’s view on higher oil prices and an outlook for less volatility, the analysts wrote in a note.
Fuel prices hovered near three-month highs on Monday, set to post their biggest monthly gains in over a year on expectations that Saudi Arabia would extend voluntary output cuts into September and tighten global supply.
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Saudi supply cuts have brought back deficits, the Goldman analysts said, adding that they see the extra 1 million bpd Saudi cut to last through September and be halved from October.
Russia, on the other hand, was on course to slash over 500,000 barrels per day in the month of August.
The decision came just a month after fuel in Kenya recorded a steady spike in prices after President William Ruto increased the Value Added Tax (VAT) on fuel from 8 per cent to 16 per cent.
On July 1, Super Petrol rose by Ksh13.49 to retail at Ksh195.53 per litre while Diesel increased by Ksh12.39 to retail at Ksh179.67. Kerosene, on the other hand, retails at Ksh173.44.
If the prices shoot up, the Energy and Petroleum Regulatory Authority (EPRA) is likely to review its own pricing which may result in prices crossing the Ksh200 mark.
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