Goldman Sachs Analyst Expect Global Oil Demand to Return by 2022
Analysts at Goldman Sachs predict that oil demand will recover to pre-pandemic levels by 2022, according to CNBC.
The analysts note that an increase in commutes, a shift to private transportation, and higher infrastructure will contribute to the rebound. Analysts published their research on Thursday, stating that oil demand would decline by 8 percent in 2020, rebound by 6 percent in 2021, and fully recover in 2022.
However, analysts determined that jet fuel demand has been the “biggest loser” from the pandemic. Consumers will be reluctant to fly without a vaccine. Jet fuel may recover by 2023.
Oil prices surged in recent months, recovering from a heavy sell-off that saw future contracts dip into negative territory. Brent crude futures traded at $42.75 a barrel on Thursday, while US West Texas Intermediate futures traded at $40.43.
Brent and WTI futures surged over 80 and 91 percent, respectively, during the second quarter. However, both are still down more than a third since the start of the year.
Goldman analysts utilized their Refining Oil Auto Demand (ROAD) model, and stated that their forecast was “driven by solid fundamental economic growth, emerging market demographics and relatively low oil prices.”
“We believe non-OECD countries and petrochemicals sector in particular will be the key drivers of oil demand growth in the next decade.”