Goldman Sachs sees oil prices rising 22% this summer as Europe eyes switch to crude from gas amid Russian supply cutoff

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  • Goldman Sachs doubled down on its prediction that oil prices will climb to $140 a barrel this summer.

  • Goldman's commodities research chief told CNBC the "under-investment thesis" is driving his bullishness.

  • "The upside risk on oil and oil products is tremendously high right now," Jeff Currie said.

Goldman Sachs doubled down on its forecast for oil prices hitting $140 per gallon over the summer after crude suffered two consecutive weekly losses for the first time since April.

The bank's chief commodities strategist, Jeff Currie, told CNBC the the recent price pullbacks are a buying opportunity and that under-investment in the space continues to drive the view for oil climbing higher.

"The situation across the energy space is incredibly bullish right now," he said.

Currie's comments back up a note published by Goldman on June 7 that predicted Brent crude prices will hit $140 per barrel. Oil has surged as much as 50% from the start of 2022 as Russia's invasion of Ukraine has upended global markets and pushed buyers away from Moscow's supply.

On Monday, Brent futures rose 1.56% to $114.88 a barrel, meaning Goldman's forecast represents upside potential of more nearly 22%.

"Investment continues to run from the space at a time it should be coming to the space," Currie told CNBC. "Ultimately, the only way you're solving these problems is through increased investments."

He also pointed to turbulence in the European energy market as Russia has slashed flows of natural gas from the Nord Stream 1 pipeline in recent weeks.

"You're going to have to replace that gas, and oil is going to be one of the [things] to replace it with," Currie said. "The upside risk on oil and oil products is tremendously high right now."

Read the original article on Business Insider