Oil extends losses on demand woes as Goldman cuts outlook again
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Brent futures fell below US$74 a barrel after capping a 1.8 per cent decline last week, the biggest weekly drop since early May.
PHOTO: REUTERS
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SINGAPORE – Oil extended losses amid persistent concerns around the demand outlook as Goldman Sachs cut its price forecast again.
Brent futures fell below US$74 a barrel after capping a 1.8 per cent decline last week, the biggest weekly drop since early May.
Goldman made its third downward price revision for the global benchmark in six months, trimming its estimate to US$86 for the end of 2023 on rising supplies and waning demand.
Oil in London is around 14 per cent lower in 2023 as fears of a US slowdown, China’s anaemic economic recovery and robust Russian flows weigh on the outlook.
Even a recent pledge by Saudi Arabia to cut more production in July
The immediate gain after the announced curbs a week ago lasted only a day.
“We are at a juncture where markets are willing to bet that demand risks could overwhelm the Saudis’ ability to boost prices,” said Mr Vishnu Varathan, the Asia head of economics and strategy at Mizuho Bank.
Weakness in China, Europe and the United States are all weighing on the outlook, he added.
There are some bullish signs, however.
Hedge funds boosted bullish bets on Brent and West Texas Intermediate crude in the week ended last Tuesday.
The US Federal Reserve is also expected to skip an interest rate hike
