Goldman expects summer demand to lift Brent crude to $86/bbl in Q3

June 10 (Reuters) – Healthy growth in consumer spending and solid summer demand will push the oil market to a deficit of 1.3 million barrels per day (bpd) in the third quarter and lift benchmark Brent prices to $86 a barrel, Goldman Sachs said.

The bank cut its 2024 oil demand growth forecast by 0.2 million bpd to 1.25 million bpd, but said it expected demand growth to be robust, mainly due to the recovery in jet fuel.

The modest reduction in China-driven demand growth for 2024 offsets a 0.1 million bpd cut in non-OPEC supply and an assumption of higher purchases of US strategic oil reserves, the bank said in a note on Sunday.

Brent crude futures and U.S. West Texas Intermediate crude futures were trading around $79.85 and $75.74 a barrel, respectively, by 0448 GMT on Monday.

The Wall Street bank sees Brent averaging $84 and WTI at $79 a barrel in 2024. It continues to expect Brent in the $75-$90 range and kept its 2025 average price forecast unchanged at 82 dollars per barrel.

“We still see a cap of $90/bbl in our base case, with no geopolitical supply shocks, and the risks to our $75-$90 range are similarly modest to the downside,” Goldman said.

Analysts at the bank said they see a $75/bbl threshold below Brent as physical demand for oil, including from China and the US SPR, tends to rise when prices fall.

Additionally, OPEC’s agreement on new production baselines through 2026 signals stronger cohesion, further reducing the likelihood of much lower prices, Goldman said, noting that financial demand for oil is likely to increase substantially if speculative positioning very low is now normalizing.

“A six-month normalization of crude oil and product net managed money positioning to the 2022 average would increase oil financial demand by 1.5 million bpd.” (Reporting by Swati Verma in Bengaluru; Editing by Varun HK)