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Don't rule out an energy crisis: Goldman Sachs
Yahoo Finance
Don't rule out an energy crisis: Goldman Sachs
Brian Sozzi·Anchor, Editor-at-Large
Wed, October 6, 2021, 12:23 PM
Goldman Sachs' energy research team caught a lot of attention on the Street last week when they said Brent crude oil at $90 a barrel was in its sights by year-end.
Now they are back with another reality check: an energy crisis must not be ruled out given the supply/demand dynamics in the market.
"When you head into winter with critically low inventories, it has the potential to be a crisis," said Goldman Sachs head of energy research Damien Courvalin on Yahoo Finance Live. "It would take a cold winter to really face the risk of gas shortages. How did we get here? It's the nature of the economic recovery since COVID has been [about] less mobility, less oil demand but more power demand. There has been a structural increase in the consumption of electricity, and then on the face of that under-investment on the supply side. It feels like a crisis today, but that won't be resolved into the short-term. This is a risk that will present itself again next winter."
Since that call on oil by Goldman a week ago, energy prices of all kinds have kicked into warp overdrive amid rising supply fears globally. ... U.S. natural gas prices are hovering around levels not seen since 2008. At one point in Wednesday's session, U.K. natural gas prices were up 60% in the past two days. Brent crude oil is up 4%, climbing beyond $81 a barrel. ... Coal price inflation has prompted rolling blackouts in China.
{snip}
Don't rule out an energy crisis: Goldman Sachs
Brian Sozzi·Anchor, Editor-at-Large
Wed, October 6, 2021, 12:23 PM
Goldman Sachs' energy research team caught a lot of attention on the Street last week when they said Brent crude oil at $90 a barrel was in its sights by year-end.
Now they are back with another reality check: an energy crisis must not be ruled out given the supply/demand dynamics in the market.
"When you head into winter with critically low inventories, it has the potential to be a crisis," said Goldman Sachs head of energy research Damien Courvalin on Yahoo Finance Live. "It would take a cold winter to really face the risk of gas shortages. How did we get here? It's the nature of the economic recovery since COVID has been [about] less mobility, less oil demand but more power demand. There has been a structural increase in the consumption of electricity, and then on the face of that under-investment on the supply side. It feels like a crisis today, but that won't be resolved into the short-term. This is a risk that will present itself again next winter."
Since that call on oil by Goldman a week ago, energy prices of all kinds have kicked into warp overdrive amid rising supply fears globally. ... U.S. natural gas prices are hovering around levels not seen since 2008. At one point in Wednesday's session, U.K. natural gas prices were up 60% in the past two days. Brent crude oil is up 4%, climbing beyond $81 a barrel. ... Coal price inflation has prompted rolling blackouts in China.
{snip}
1 replies
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