Goldman Sachs economists forecast oil prices will soar to $140 a barrel this summer, with a drop in Russian production and a gradual recovery in Chinese demand adding to the pressure on already low supplies.
However, they said that consumers will feel as though oil has hit $160 a barrel, because a lack of capacity at refineries means gasoline and fuel prices are rising more than would normally be expected, adding to costs across the economy.
Oil pricessoared 50% this year as a result of Russia’s invasion of Ukraine and broader supply and demand imbalances. High oil prices have pushed US gas prices to a record high of $4.92 a gallon, according to the AAA.
Brent crude, the international benchmark, and WTI crude, the US benchmark, traded at around $119 and $118 a barrel respectively Tuesday.
Goldman’s analysts, including chief commodities strategist Jeff Currie, said in a note Monday that they expected prices to go higher “given the current record low levels of inventories.”
They predicted Brent will average roughly $140 a barrel in the third quarter of the year, but said it could go higher.
