How Russian oil sanctions still weigh on the global energy market
The outlook for oil (CL=F, BZ=F) prices remains mixed, with the price of Brent crude expected to range between $70 and $85 per barrel. Goldman Sachs co-head of Global Commodities Research Daan Struyven joins Market Domination to highlight key factors that could drive oil prices higher. "In fact our valuation model for oil suggests that oil is currently underpriced by, you know, $6 to $7 per barrel," Struyven tells host Julie Hyman. The main drivers for potential price increases include low oil inventories, which are at levels not seen since mid-2022. Geopolitical factors, particularly regarding the war between Russia and Ukraine, could influence the oil market, but Struyven says "we don't think it would change the volumes of oil in the market." "However, while sanctions are constraining natural gas flows out of Russia, we don't think sanctions are constraining Russian flows out of Europe," Struyven says. He explains that while sanctions have affected Russian natural gas (NG=F), oil flows remain unaffected due to a production agreement between Russia and Saudi Arabia. Additionally, a slowdown in global growth could lead to some price reductions, but Struyven believes "it would take time" for demand and inventories to adjust. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Josh Lynch
