Goldman Sachs Warns Refinery Shortages Will Persist
As the scale of global refinery outages surpasses even the worst-case scenario, Goldman Sachs has forecasted that the supply shortage of petroleum products will continue until next year. The analysis indicates that while diplomatic negotiations can lower crude oil prices, damaged refinery facilities
Goldman Sachs warns that refinery shortages will persist until next year as global supply of petroleum products remains constrained. According to the commodities team's analysis, refinery outages in the Middle East and Russia exceeded average levels by 1.6 million and 4.2 million barrels per day respectively. This combined total of 5.8 million barrels per day surpasses the 5 million barrels per day worst-case scenario predicted by Goldman Sachs in September.
The ongoing Ukrainian attacks on Russian refineries and transport bottlenecks have further tightened supply. Crude oil freight rates reached a record high of $24 per barrel, up eight times from a year ago, and petroleum product vessels were redirected to transport crude oil, reducing the volume of gasoline, diesel, and aviation fuel.
Additionally, inventory buffer capacity has hit bottom, with Middle Distillate inventories in Singapore down 44% and aviation fuel inventories in Europe’s ARA declining by 56%. Goldman Sachs forecasts Brent crude to fall to $90 per barrel in December, and average $80 next year, indicating a trend of 'weak crude oil, strong petroleum products.'
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