1、Oi l pri ces are down sl i ghtl y thi s year despi te demand exceedi ng our opti mi sti c nexpectati ons.Non-core OPEC suppl y has been much stronger than expected,partl y offset by OPEC cuts.We bel i eve that one-off factors drove the suppl y beats,concentrated i n the US(easi ng constrai nts),Russ

2、i a and I ran(pol i cy).We expect demand growth to remai n sol i d and core OPEC suppl y to remai n l ow ni n 2024.We thus expect the oi l market to ti ghten at a moderate pace,but preserve si gni ficant spare capaci ty to handl e ti ghteni ng shocks,whi ch effecti vel y del ays the super cycl e.We

3、bel i eve that OPEC wi l l ensure Brent i n a$80-$100 range by l everagi ng i ts npri ci ng power,wi th a$80 floor from the OPEC put,and a$100 cei l i ng from spare capaci ty.Whi l e hi gher non-OPEC suppl y or l ower GDP are downsi de ri sks to pri ces,we esti mate that Brent woul d remai n cl ose

4、to$80 unl ess OPEC became l ess asserti ve.Thi s range shoul d offer robust spot(15%over 12M)and carry(12%)returns,and we al so see hedgi ng val ue agai nst geopol i ti cal suppl y shocks.We expect that a 0.7mb/d defici t wi l l rai se Brent to a 2024 average of$92/bbl.nWe see sol i d 1.6mb/d demand

5、 growth gi ven sol i d GDP growth,structural EM i ncreases,and a j et fuel recovery.US suppl y growth i s set to sl ow gi ven fal l i ng ri gs,capi tal di sci pl i ne,and soft producti vi ty.We assume a gradual unwi nd of the extra Saudi cut,and extended group cuts because they support revenues.Whi

6、l e there i s ampl e spare capaci ty i n oi l producti on,we expect refini ng to nremai n structural l y ti ght.We thus expect compl ex refinery margi ns to ri se,especi al l y for gasol i ne as hi gh octane i nputs get scarce agai n i n summer.Top trades:nOPEC Range:Profit i f Jun24 Brent i s above

7、 75;short put,l ong cal l spread 2024 Deficits:Long Aug24/Sep24 Brent ti mespread Summer Gasoline Tightness:Long Sum24 Europe Gasol i ne-Brent crack Daan Struyven+1(212)357-4172| Gol dman Sachs&Co.LLC Callum Bruce,CFA+1(212)902-3053|cal l Gol dman Sachs&Co.LLC Yulia Zhestkova Grigsby+1(646)446-3905|

8、yul i a.gri Gol dman Sachs&Co.LLC Blake Woods+1(972)368-9739|bl Gol dman Sachs&Co.LLCOil Analyst 2024 Oil Outl ook:Robust Returns in the OPEC Range16 November 2023|1:40PM EST Thi s report i s i ntended for di stri buti on to GS i nsti tuti onal cl i ents onl y.I nvestors shoul d consi der thi s repo

9、rt as onl y a si ngl e factor i n maki ng thei r i nvestment deci si on.For Reg AC certi ficati on and other i mportant di scl osures,see the Di scl osure Appendi x,or go to Expect Oil Prices in a$80-100 Range 20406080406080100120140Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25Jan-26Br

10、ent Price with GS ForecastRealized Brent PriceForecastFutures$/bbl$/bblLikely Range:$80-100 Source:ICE,Gol dman Sachs Gl obal Investment Research16 November 2023 2Goldman SachsOil Analyst qZaXlXcXwWgVzWaXiYqOoQqO7NcM8OmOmMmOtQfQmNnMlOsQqQ6MnMwOMYrQmQNZtRoQ2024 Outlook:Robust Returns in the OPEC Rang

11、e Fol l owi ng the l atest sel l off,Brent oi l pri ces are down sl i ghtl y year-to-date despi te demand exceedi ng even our own opti mi sti c expectati ons.I n fact,we esti mate that oi l demand growth of 2.5mb/d thi s year i s on track to exceed the I EA and even our own opti mi sti c expectati o

12、ns as of a year ago by 800 and 500kb/d,respecti vel y(Exhi bi t 1,l eft panel).The key surpri se has been much stronger than expected non core OPEC producti on,partl y offset by core OPEC suppl y cuts.We bel i eve that two one off factors drove the upsi de surpri ses to suppl y outsi de of core OPEC

13、,concentrated among a few countri es.Fi rst,the post-pandemi c easi ng i n suppl y constrai nts for ri gs,parts,and workers,and rel ated effici ency gai ns have provi ded a one-ti me boost to US producti on growth.1 Second,suppl y from certai n sancti oned economi es has exceeded expectati ons i n 2

14、023 as Western pol i cymakers fought the energy cri si s wi th a pri ce cap keepi ng Russi an barrel s on the market whi l e ri si ng I rani an exports unl ocked producti ve capaci ty.As both factors are unl i kel y to boost suppl y growth much further,we expect suppl y growth outsi de core OPEC to

15、sl ow to 1.5mb/d i n 2024(vs.2.6mb/d i n 2023),especi al l y i n the US.We,however,expect demand growth to remai n sol i d(1.6mb/d yoy)and core OPEC suppl y to remai n l ow i n 2024(-0.3mb/d yoy),as we bel i eve that OPECs more asserti ve market management i s structural.On net,we expect a moderate

16、0.7mb/d defici t i n 2024,sl i ghtl y wi der than the 0.3mb/d defici t i n 2023.We thus expect the oi l marketwhi ch i s now onl y sl i ghtl y ti ghter than usual based on the l evel of OECD commerci al stocksto ti ghten at a moderate pace,but preserve si gni ficant spare capaci ty to handl e near-t

17、erm ti ghteni ng shocks.Whi l e thi s spare 1Si mi l arl y,faster-than-expected executi on drove the 2023 suppl y beat i n Brazi l.Exhibit 1:Upside Surprises in 2023 To Oil Demand and Non-OPEC Supply Surprises to 2023 Oil Demand and Supply Growth(vs.GS End-2022 Expectations)04008001,2001,60004008001

18、,2001,600Supply GrowthTotal SurpriseDownsideSurpriseUpsideSurprisekb/dkb/d0050060000500600OECD DemandNon-OECD DemandGlobal DemandDemand GrowthTotal SurpriseUpsideSurprisekb/dkb/d Source:IEA,Kpl er,JODI,EIA,National Sources,Gol dman Sachs Gl obal Investment Research16 November 2

19、023 3Goldman SachsOil Analyst capaci ty effecti vel y del ays the next oi l super cycl e,i t doesnt necessari l y prevent i t,gi ven how ti ght l ong-term suppl y dri vers of future ti ghtness(e.g.capex)sti l l l ook(Exhi bi t 2).Exhibit 2:We Expect the Oil Market to Tighten in 2024 But to Preserve

20、Significant Spare Capacity Source:IEA,Pl atts,OPEC,EIA,Gol dman Sachs Gl obal Investment Research16 November 2023 4Goldman SachsOil Analyst The OPEC Range We bel i eve that OPEC wi l l ensure that Brent oi l pri ces end up i n a$80-$100 range i n 2024 by ensuri ng a moderate defici t and l everagi n

21、g i ts pri ci ng power.Thi s range shoul d offer i nvestors robust spot and carry returns i n most scenari os.At the same ti me,we al so see hedgi ng val ue i n oi l i n ri sk scenari os wi th geopol i ti cal l y dri ven suppl y di srupti ons,where ri sk assets perform poorl y.A$80 Floor Under Brent

22、 We bel i eve that Brent i s unl i kel y to sustai nabl y drop bel ow$80/bbl next year for three reasons.Fi rst,the OPEC put i s l i kel y to stay i n pl ace.The cuts i n October 2022,Apri l and June 2023,and the September extensi on of the extra Saudi cut suggest that the OPEC put si ts at$80 to$85

23、/bbl (Exhi bi t 4).Whi l e the ri se i n spare capaci ty i mpl i es that thi s put i s l ess strong than a year ago,we bel i eve that a sustai ned drop bel ow$80 woul d l i kel y l ead OPEC+to bri ng back barrel s more sl owl y.Second,the gl obal economy i s approachi ng a soft l andi ng,where core

24、i nflati on returns to target wi th l i mi ted damage to l abor or oi l demand.Thi rd,US net publ i c and pri vate demand for oi l ri ses when pri ces fal l.The US Department of Energy rei terated i ts commi tment to repl eni sh the SPR as an i ncremental pri ce-sensi ti ve buyer,and ai ms to purcha

25、se up to 6mb of oi l i n January at WTI of$79/bbl or bel ow.And we esti mate that a 10%oi l pri ce decrease l owers US l i qui ds suppl y by around 1%or 200kb/d.Exhibit 3:We Expect Oil Prices to Stay in a$80-100 Range 20406080406080100120140Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25

26、Jan-26Brent Price with GS ForecastRealized Brent PriceForecastFutures$/bbl$/bblLikely Range:$80-100 Source:ICE,Gol dman Sachs Gl obal Investment Research16 November 2023 5Goldman SachsOil Analyst A$100 Cap on Brent We bel i eve that Brent i s unl i kel y to sustai nabl y exceed around$100/bbl next y

27、ear for three reasons.Fi rst,hi gh spare capaci ty of 6mb/d l i mi ts the upsi de to l ong-dated oi l pri ces(Exhi bi t 5,l eft panel).Wi th ampl e spare capaci ty,l ong-dated pri ces do not need to i ncrease to encourage faster growth i n l ong-cycl e proj ects,and we sti l l esti mate the fai r va

28、l ue for 36m Brent at$74/bbl.Second,OPEC i s unl i kel y to push ti mespreads to extreme l evel s,whi ch woul d reduce l ong-term resi dual demand for OPEC barrel s.Speci fical l y,we find that the 2022 energy cri si s boosted l ong-run non-OPEC suppl y vi a a return to offshore growth,and l owered

29、l ong-run oi l demand vi a i nvestment i n al ternati ves to oi l,i ncl udi ng EVs.Thi rd,the destocki ng i n Chi na crude i nventori es and the hi t to crude demand from erodi ng refinery margi ns fol l owi ng the ri se i n Brent to nearl y$100/bbl i n l ate September i l l ustrate pri ce-el asti c

30、 crude demand from Chi na and refiners as a key bal anci ng mechani sm.Exhibit 4:The OPEC Put Currently Appears to Sit Around$80 to$85/bbl 0070809005060708090100Mar301998Jun241998Nov261998Mar231999Mar292000Mar172001Dec122002Sep242003Feb102004Dec102004Sep112006Dec142006Oct242008

31、Dec172008Sep282016Nov302016Dec72018Dec62019Mar52020Apr92020Oct52022Apr22023Jun42023Sep52023OPEC Announcement DateBrent Oil Price on Friday Preceding OPEC Production Cut(or Extension of Cut)$/bbl$/bbl Green bars ref er to the unil ateral Saudi cut or its extension.Source:OPEC,ICE,Gol dman Sachs Gl ob

32、al Investment Research16 November 2023 6Goldman SachsOil Analyst As Brent pri ces are l i kel y to recover to the upper hal f of the 80-100 range,oi l shoul d offer robust spot returns.We al so bel i eve that OPEC wi l l pursue backwardati on,and anti ci pate that an el evated 12%rol l or carry retu

33、rn wi l l be a l arge contri butor to our forecast of a 36%total return for Brent over the next 12M.We next revi ew the key dri vers of our forecast of a moderate defici t i n 2024.Exhibit 5:Elevated Spare Capacity and China Destocking Put a Cap on Oil Prices 0246812Jan-70Jan-80Jan-90Jan-

34、00Jan-10Jan-20OPEC ex Iran Spare Capacitymb/dmb/d-60-40-200204060707580859095100Jan-23Mar-23May-23Jul-23Sep-23Nov-23Brent:15-Day Lag(left,inverted)China Inventories:60-Day Change(right)$/bblmbHigh PriceChinaDestocking Source:Pl atts,IEA,OPEC,EIA,Kpl er,ICE,Gol dman Sachs Gl obal Investment Research

35、Exhibit 6:We Forecast Robust Returns From Investing in Brent Futures From Price Appreciation and Roll Return 0%5%10%15%20%25%30%35%40%0%5%10%15%20%25%30%35%40%3m6m12mDecomposition of Brent ReturnsCollateral ReturnRoll ReturnPrice ReturnTotal ReturnPercentPercent Source:Gol dman Sachs Gl obal Investm

36、ent Research16 November 2023 7Goldman SachsOil Analyst A Moderate Deficit in 2024 We expect that robust demand,sl owi ng US suppl y growth,and l ower OPEC suppl y for l onger wi l l resul t i n a moderate 0.7mb/d 2024 defici t.As a resul t,we expect that gentl e i nventory decl i nes(Exhi bi t 7)wi

37、l l rai se ti mespreads and Brent to a peak of$95/bbl by August 2024,wi th the 2024 average at$92/bbl.2 Deficit Driver#1:Robust Demand Growth We see sol i d 1.6mb/d oi l demand growth i n 2024 gi ven sol i d gl obal GDP growth,structural EM i ncreases,and an ongoi ng j et fuel recovery.Our economi s

38、ts forecast above-consensus gl obal GDP growth of 2.6%based on strong i ncome growth,a smal l er drag from monetary and fiscal ti ghteni ng,a recovery i n manufacturi ng acti vi ty,and an i ncreased wi l l i ngness of central banks to del i ver i nsurance cuts.Thi s rel ati vel y opti mi sti c vi ew

39、 on GDP i s a key i nput i nto our oi l demand model s.EMs wi th structural l y posi ti ve demand trends dri ve our forecast of 1.4mb/d 2024Q4-Q4 growth,i ncl udi ng Chi na(450kb/d),I ndi a(300kb/d),the Mi ddl e East(150kb/d),and other non-OECD Asi a(200kb/d).2We have wi dened our WTI-Brent di ffere

40、nti al sl i ghtl y from$3.8/bbl to$4.4/bbl,reflecti ng the ral l y i n di rty frei ght markets on a potenti al l y stri cter enforcement of the Russi an pri ce cap.Exhibit 7:We Forecast Gentle Inventory Declines in 2024 Source:IEA,Gol dman Sachs Gl obal Investment Research16 November 2023 8Goldman S

41、achsOil Analyst By product,we forecast another year of sol i d j et fuel demand growth of 0.6mb/d,and a pi ckup i n growth for the petchem ori ented LPG and naphtha products to 0.5mb/d(Exhi bi t 9).We sti l l see some room for post-pandemi c recovery i n i nternati onal Asi a fli ghts,wi th gl obal

42、j et fuel demand i n 2023Q3 sti l l 0.7mb/d bel ow i ts 2019Q3 l evel.We expect demand for petchem-ori ented products to re-accel erate towards i ts sol i d structural trend as the destocki ng headwi nd fades wi th a normal i zati on i n i nventory-to-sal es rati os and i nterest rates.Exhibit 8:We

43、Look for Firm 2024 Oil Demand Growth in EMs Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42022202320242025-4-3-2-10123-4-3-2-10123Cumulative Change in Oil Demand Since 2023Q4ChinaIndiaMiddle EastRest of Non-OECDRest of OECDUSOECD EuropeTotal Change in Oil Demandmb/dmb/d Source:IEA,Kpl er,JODI,EIA,National Sources,Gol d

44、man Sachs Gl obal Investment Research Exhibit 9:We Expect Jet Fuel and Petrochemical Products(LPG&Naphtha)to Drive Solid 2024 Demand Growth of 1.6mb/d-0.50.00.51.01.52.02.53.0-0.50.00.51.01.52.02.53.02015-19Average Change2022202320242025Oil Demand Growth by ProductOther ProductsGas/Diesel OilMotor G

45、asolineLPG&NaphthaJet Fuel&Kerosenemb/dmb/d Source:IEA,JODI,EIA,National Sources,ICIS,Kpl er,Haver Anal ytics,ICE,Gol dman Sachs Gl obal Investment Research16 November 2023 9Goldman SachsOil Analyst Deficit Driver#2:Slowing US Supply Growth We expect suppl y growth outsi de core OPEC to sl ow down t

46、o 1.5mb/d i n 2024(from 2.6mb/d i n 2023).We especi al l y l ook for a moderati on i n total l i qui ds suppl y growth i n the US to 530kb/d(vs.1.4mb/d),and Brazi l to 220kb/d(vs.0.4mb/d).Despi te thi s sl owdown,the Ameri cas are set to conti nue to dri ve gl obal suppl y growth i n 2024 wi th acce

47、l erati ons i n Guyana(180kb/d),and Canada(150kb/d).We expect US l i qui ds suppl y growth to sl ow for three reasons.3 Fi rst,the US oi l ri g count has conti nued i ts surpri si ng descent,and i s now down 21%from the l ate 2022 peak.3On a Q4-Q4 basi s,our 2024 US suppl y growth forecast i s 360kb

48、/d wi th contri buti ons of 250kb/d from crude,and 130kb/d from NGLs.Exhibit 10:We Forecast a Moderation in US Total Liquids Supply Growth to 0.5mb/d in 2024-0.30.00.30.50.81.01.31.5-0.30.00.30.50.81.01.31.5202242025US Liquids Supply GrowthOtherCrudemb/dmb/d Source:IEA,EIA,Gol dman Sachs

49、Gl obal Investment Research16 November 2023 10Goldman SachsOil Analyst Second,US producers remai n capi tal di sci pl i ned.US publ i c i ndependent firms are sti cki ng to the moderate si ngl e di gi t growth targets announced i n 2020-2021.Our energy equi ty anal ysts expect crude producti on grow

50、th by the i ndependent US E&Ps under GS coverage to sl ow from around 235kb/d i n 2023 to 135kb/d i n 2024(Exhi bi t 11,ri ght panel).Rei nvestment ratescapex as a share of operati ng cash flowof publ i c producers remai n i n a 40-60%range,wel l bel ow the hi stori cal average(Exhi bi t 12,l eft pa

51、nel).Thi rd,underl yi ng wel l producti vi ty i n the Permi an basi n(the key US growth engi ne)has stopped i ncreasi ng,reflecti ng an offset between deteri orati ng rock qual i ty and i mprovi ng technol ogy(Exhi bi t 12,ri ght panel).Exhibit 11:The US Rig Count Is Down 21%Since Late 2022;Public P

52、roducers Are Signaling a Production Slowdown 050005002023Estimate2024Estimate2025EstimateUS Crude Production YoY Growth by Public Independent E&Ps Under GS CoverageOtherDiamondbackEOG ResourcesPioneerConocoPhillipskb/dkb/d Source:Baker Hughes,Haver Anal ytics,Company data,Gol d

53、man Sachs Gl obal Investment Research Exhibit 12:US Public Producers Remain Capital Disciplined;Underlying Well Productivity Has Stopped Increasing 0204060800020406080020002004200820024Reinvestment Rate:Capex as a Share of Operating Cash Flow of US Public Oil Produce

54、rsEstimatePercentPercent024680082009200000222023Permian Wells:Average First 6 MonthProduction Adjusted by Lateral Length kb/1,000ftkb/1000ft Source:Haver Anal ytics,Company data,Enverus,Gol dman Sachs Gl obal Investment Research16 Nov

55、ember 2023 11Goldman SachsOil Analyst Deficit Driver#3:Lower OPEC Supply for Longer We bel i eve that the OPEC+suppl y cuts si nce l ate 2022 reflect a structural shi ft to a more asserti ve approach of keepi ng i nventori es l ow,and pursui ng backwardati on.4 Because of the reduced non-OPEC suppl

56、y response to producti on cuts,we esti mate that OPEC group cuts now boost Saudi oi l profits.As a resul t,Saudi Arabi a and the other 8 OPEC+countri es,whi ch cut producti on by 1.7mb/d i n Apri l,are l i kel y to keep thei r group cut ful l y i n pl ace i n 2024.We assume that Saudi Arabi a unwi n

57、ds the extra 1mb/d uni l ateral cut onl y gradual l y starti ng i n 2024Q3 by 0.25mb/d every two months because i ts appears determi ned to l ower i nventori es and support el evated fundi ng needs.Our forecast for l ow OPEC suppl y i s al so consi stent wi th our stati sti cal findi ng that the gro

58、up i s i n no rush to boost producti on because commerci al OECD stocks remai n onl y sl i ghtl y bel ow thei r hi stori cal average.4Pursui ng backwardati on i s general l y i n OPECs i nterest for three reasons.Fi rst,i t preserves the opti on val ue of spare capaci ty,whi ch al so di scourages no

59、n-OPEC i nvestmenent.Second,OPEC can generate l arger moves i n pri ces wi th a gi ven adj ustment i n producti on when i nventori es are l ow.Thi rd,whi l e OPEC i s too l arge to sel l i ts producti on forward and i s thus exposed to spot pri ces,shal e producers often sel l at forward pri ces thr

60、ough hedgi ng.Exhibit 13:Lower Saudi Crude Supply For Longer Source:OPEC,Gol dman Sachs Gl obal Investment Research16 November 2023 12Goldman SachsOil Analyst Stress Testing the 80-100 Range We next stress test our vi ew that oi l pri ces wi l l be i n a 80-100 range i n 2024.We esti mate the effect

61、 of three key ri sks on our 2024Q4 Brent forecast of$94/bbl usi ng our pri ci ng framework.Based on our assessment of the l i kel y OPEC response,we concl ude that Brent i s l i kel y to remai n i n or cl ose to our 80-100 range i n most ri sk scenari os unl ess OPEC became si gni ficantl y l ess as

62、serti ve(downsi de pri ce ri sk),or i f OPEC i s prevented from depl oyi ng i ts spare capaci ty(tai l upsi de pri ce ri sk).Moderate recession(-$17/bbl under OPEC response):Thi s scenari o assumes a nmoderate OECD recessi on starti ng i n 2024Q1,l asti ng 4 quarters,wi th spi l l overs to non-OECD

63、economi es.5 I n thi s scenari o,we thi nk that key OPEC+countri esSaudi Arabi a,Russi a,UAE,Kuwai t,and I raqwoul d l i kel y not gradual l y rai se producti on(as our basel i ne assumes).I f output from these 5 countri es stays flat at i ts 2023Q4 l evel,then Brent woul d be$17 l ower than i n our

64、 basel i ne,and reach$77/bbl i n 2024Q4.I f OPEC+output were to ri se i n l i ne wi th our basel i ne suppl y outl ook despi te a recessi on,then 2024Q4 Brent woul d be$31 l ower at$62/bbl.Non OPEC supply beats again(-$12/bbl under OPEC response):Thi s scenari o nassumes that gl obal suppl y excl ud

65、i ng core OPEC,I raq,and Russi a,I ran beats our expectati ons i n 2024 by the same magni tude as i n 2023.I n thi s scenari o,extensi ons of the extra Saudi cut through 2024 and the group cut announced i n Apri l 2023 through 2025Q1 appear l i kel y.On net,we esti mate that Brent woul d then be$12

66、l ower than i n our basel i ne,and reach$82/bbl i n 2024Q4.I f OPEC+output were to ri se i n l i ne wi th our basel i ne suppl y outl ook,we esti mate that 2024Q4 Brent woul d be$19 l ower at$74/bbl.Supply disruptions(+$5/bbl under OPEC response):Thi s scenari o assumes a n0.5mb/d ri se i n unpl ann

67、ed producti on di srupti ons to the 2011-2023 average of 1.8mb/d starti ng i n 2024Q1.6 I n thi s scenari o,we thi nk that Saudi Arabi a may start unwi ndi ng i ts extra cut i n 2024Q2(vs.our 2024Q3 basel i ne).On net,we esti mate that Brent woul d be$5 hi gher than i n our basel i ne,and reach$99/b

68、bl i n 2024Q4.Combi ni ng these di srupti ons and our basel i ne suppl y path woul d i mpl y$8/bbl of upsi de wi th 2024Q4 Brent at$102/bbl.5I t assumes a peak 4%hi t to the l evel of OECD GDP(rel ati ve to the GS basel i ne),whi ch i s sl i ghtl y more moderate than the medi an hi stori cal recessi

69、 on i n G10 economi es,and a peak 2%hi t to non-OECD GDP.6We use EI A esti mates of gl obal unpl anned di srupti on producti ons excl udi ng I ran,Russi a,Norway,North Sea,and the UK.The EI A esti mates the l argest 2023Q3 di srupti ons for I raq,Ni geri a,and Li bya.16 November 2023 13Goldman Sachs

70、Oil Analyst si zabl e.Speci fical l y,we esti mate Oil AnalystGoldman Sachs14 16 November 2023Source:ICE,Haver Anal ytics,Gol dman Sachs Gl obal Investment Research$/bbl$/bblFuturesGS Likely RangeResponseNo OPECResponseOPEC2024Q4 Brent PricesModerate RecessionNon-OPEC Supply BeatsSupply Disruptions1

71、2000200 Exhibit 14:The OPEC Response Is Likely to Keep Prices in a 80-100 Range extended di srupti on.of i nterrupti on,and may temporari l y doubl e i n the much l ess l i kel y scenari o of an cannot depl oy i ts spare capaci ty i ni ti al l y ri se 20%above our basel i ne i

72、n the first month that oi l pri ces i n thi s tai l scenari o where core OPEC trade through the Strai t of Hormuz,as hi ghl y unl i kel y,the resul ti ng ral l y woul d l i kel y be Whi l e we see a severe suppl y downsi de ri sk scenari o,such as a potenti al i nterrupti on of Refinings Catch-22 Wh

73、i l e there i s ampl e spare capaci ty i n upstream crude oi l producti on,the downstream refini ng system remai ns the ti ghtest sector of the oi l i ndustry,i mpl yi ng persi stentl y el evated refined product margi ns and ti mespreads.Structural Tightness We esti mate that the current gl obal ref

74、ini ng uti l i zati on rate of 85%si ts i n percenti l e 90 of i ts hi stori cal di stri buti on(Exhi bi t 15),and 3-4 p.p.above the mi d-cycl e norms.Thi s structural ti ghtness reflects four key factors.Fi rst,7mb/d of di srupti ons and pandemi c-rel ated cl osures si nce the l ate 2010s have depr

75、essed refini ng capaci ty.Second,demand for refined products has reached an al l ti me hi gh.Thi rd,more frequent weather-rel ated di srupti ons,and the di vergence between the qual i ty of crude suppl y and the type of refined products i n demand are strai ni ng the system i n unusual ways.Fourth,t

76、he combi nati on of el evated l ong-run demand uncertai nty and the very l ong cycl e of refini ng i nvestments has l i mi ted i nvestment i n new refineri es.I n fact,we esti mate that the medi an DM refinery i s now 50 years ol d,wi th payback peri ods of more than two decades.Whi l e hi gh pri ce

77、s usual l y tend to cure hi gh pri ces,the durati on mi smatch between i nvestment and returns precl udes such a natural rebal anci ng.Thi s dynami crefini ngs Catch-22wi l l l i kel y cement a refini ng bul l market unti l EV-penetrati on scal es si gni ficantl y.Agai nst thi s structural l y ti gh

78、t refini ng backdrop,we expect onl y modest i ncremental easi ng over 2024-2025.Al though 1.8/1.4mb/d of net capaci ty addi ti ons(revi sed+0.1/+0.1)sti l l outwei gh the 1.4/0.9mb/d growth expected i n refined product demand(+0.1/+0.4)over thi s peri od,we now l ook for l ess i ncremental easi ng t

79、han previ ousl y.And even under our forecast of an 84.6%uti l i zati on rate i n 2025,the system remai ns Exhibit 15:The Refining System Is Structurally Tight Source:IEA,BP,IIR,OGJ,Gol dman Sachs Gl obal Investment Research16 November 2023 15Goldman SachsOil Analyst vul nerabl e to further del ays i

80、 n capaci ty addi ti ons that remai n concentrated i n EMs wi th a hi story of del ays and operati onal chal l enges.The combi nati on of refini ng ti ghtness and the di storti on of demand across products i mpl i es ongoi ng di vergence i n refinery margi ns.We expect compl ex refiners to be reward

81、ed for producti on of premi um products i n hi gh demand(gasol i ne,di esel),whi l e si mpl e refiners earn l ower margi ns on produci ng surpl us naphtha(a petrochemi cal feedstock)and fuel oi l i n l ow demand.We therefore thi nk that todays l ow compl ex refini ng margi ns(bel ow the 2015-19 aver

82、age)i n mul ti pl e regi ons are not sustai nabl e and wi l l pi ck up.Higher Summer Gasoline Refinery Margins We are constructi ve on gasol i ne refinery margi ns,and neutral on di esel margi ns.Gl obal gasol i ne refinery margi ns have bounced i n recent weeks from cost support,assi sted by yi el

83、d-swi tchi ng to di esel,as we had expected.A recovery i n currentl y depressed gasol i ne posi ti oni ng i s l i kel y to further boost gasol i ne refinery margi ns.We mai ntai n our cal 24/25 gasol i ne-Brent crack forecasts at$13/10(NW European EBOB)and$18/16/bbl (US RBOB),respecti vel y,as the b

84、eari sh i ncorporati on of the l i ghter sl ate(i ncreasi ng gasol i ne suppl y)offsets bul l i sh i nventory decl i nes.Our gasol i ne refinery margi ns forecasts remai n wel l above the 2019 averages of$7/8/bbl,respecti vel y.We thus conti nue to recommend l ong posi ti ons i n summer gasol i ne m

85、argi ns,when we expect octane constrai nts to once agai n di ctate si gni ficant pri ce upsi de.We prefer to express l ength i n European product cracks,gi ven our conti nued beari sh vi ew on Renewabl e I denti ficati on Numbers(RI Ns),that are baked i nto US refined product pri ces.Exhibit 16:We E

86、xpect a Return to a Divergent Margin Environment that Rewards Complex Refiners Simple Singapore and complex US Gulf Coast refining margins adjusted for slate,yield,freight,processing costs(USD/bbl).Dashed lines are 2015-19 average-10-5055JanJanJanFebFebMarMarAprAprMayMayJunJunJulJulJulAug

87、AugSepSepOctOctNovNovDecDecDecSimple Singapore refining marginsComplex USGC refining margins Source:ICE,CME,DME,Pl atts,Refinitiv Eikon,Gol dman Sachs Gl obal Investment Research16 November 2023 16Goldman SachsOil Analyst Rel atedl y,we al so expect US retai l gasol i ne/di esel pri ces to fol l ow

88、thi s ri se i n whol esal e pri ces,ri si ng to$3.87/4.28/gal i n Summer 2024 from$3.5/gal currentl y.Turni ng to di esel,we see onl y modest val ue i n(European)di esel cracks at current l evel s,whi ch have converged to our forecasts.The reason i s that the demand hi t from warm wi nter weather an

89、d l ong posi ti oni ng remai n si gni ficant headwi nds to i ni ti ati ng l ength,especi al l y i n US heati ng oi l.We mai ntai n our cal 24/25 North Western European Gasoi l and US Heati ng Oi l-Brent crack forecasts at$25/22 and$29/26/bbl respecti vel y,as the bul l i sh i ncorporati on of the l

90、i ghteni ng sl ate(reduci ng di sti l l ate and resi due suppl y)offsets the beari sh mi l der wi nter weather.Neverthel ess,l ow i nventori es,hi gh uti l i zati on rates,expensi ve frei ght,a l i ghter sl ate,and hi gh gl obal natural gas pri ces wi l l di esel keep cracks si gni ficantl y wi der

91、than thei r 2019 averages of$16/18/bbl respecti vel y.Exhibit 17:While Upside is Limited Over Winter,We See Significant Value in Summer Gasoline Grades NW European EBOB Gasoline-Brent Crack fair value model vs spot and forward curve(USD/bbl)Exhibit 18:We See Only Modest Upside to Current Distillate

92、Forwards in Europe NW European Low Sulfur Gasoil-Brent Crack fair value model vs spot and forward curve(USD/bbl)-5060Jan-17Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25Europe EBOBForwardsModel fair value0070Europe ULSGOFwdModel fair value Source:CME,Pl atts,ICE,Gol dman Sach

93、s Gl obal Investment Research Source:ICE,Pl atts,CME,Gol dman Sachs Gl obal Investment Research Exhibit 19:Octane Constraints Will Once Again Drive Most of the Upside We See Next Summer Octane values(USD/bbl per RON in 78-93 range).Dashed lines are forecasts.01234567JanJanJanFebFebMarMarAprAprMayMay

94、JunJunJulJulJulAugAugSepSepOctOctNovNovDecDecDec2015-21 Average202220232024 Source:Pl atts,Gol dman Sachs Gl obal Investment Research16 November 2023 17Goldman SachsOil Analyst Top Trades We currentl y recommend three trades i n the oi l compl ex.OPEC Range(Jun24 Brent cont ract:Short 80 put,Long 90

95、/100 call spread,Net premi um upfront:$5.1/bbl)We bel i eve oi l pri ces remai n range-bound,wi th a c.$80/bbl floor supported by OPEC exerti ng renewed pri ci ng power,whi l e ampl e OPEC spare capaci ty provi des a$100/bbl cei l i ng.Because much of the Brent forward curve si ts bel ow thi s floor

96、,we al so i ni ti ate a l ong cal l spread to express our constructi ve vi ew.Thi s trade benefits from the hi gh current i mpl i ed vol ati l i ty and backwardati on i n the Brent futures curve.To profit from the recent sel l-off and col l apse i n cal l-skew,we buy back the$95/bbl cal l (for$2.15/

97、bbl),to protect agai nst upsi de tai l l osses,rather that recommendi ng addi ti onal extreme tai l hedges.2024 Deficits(Long Aug24/Sep24 Brent t i mespread.Last close:$0.30/bbl)Current Brent futures curve pri ci ng reflects expectati ons of rel ati vel y l oose 1H24 bal ances and no/a l i mi ted OP

98、EC response.We recommend i ni ti ati ng l ength i n Aug24 versus Sep24 Brent ti mespreads,as our Brent forecast peaks i n August 2024,a few months before our forecast for OECD commerci al i nventori es bottoms i n December 2024.Summer Gasoline Tightness(Long Sum-24 EBOB Gasoli ne-Brent cracks.Last c

99、lose:$11.5/bbl)Beyond underl yi ng refini ng constrai nts,gasol i ne faces the addi ti onal i ssue of secondary uni t constrai nts(i somerati on uni ts,al kyl ati on uni ts,reformers)that l i mi t the abi l i ty to produce hi gh-octane gasol i ne bl endi ng components,requi red for summer gasol i ne

100、 speci ficati ons.Al though these constrai nts di d bi nd i n 2022 and 2023,market forwards do not reflect a repeat despi te l i mi ted i nvestment to prevent a repeti ti on.We al so forecast sol i d gasol i ne demand as the outl ook for the gl obal consumer remai ns heal thy wi th the fal l i n cor

101、e i nflati on and ful l empl oyment.16 November 2023 18Goldman SachsOil Analyst Exhibit 20:Our Recommended OPEC Range Trade Generates Profits above$75/bbl Payoff profile using current market prices from a three-way Jun-24 Brent option strategy:Short$80 put,Long$90/100 call spread-3-2-101260 62 64 66

102、 68-20-15-10-5051015-20-15-10-505075808590955120Net Payoff(Short P80,Long C90,Short C100)Current Jun-24 Brent futures pricing$/bbl$/bbl This is equival ent to our previousl y recommended strategy af ter buying back the$95/bbl cal l Source:Gol dman Sachs Gl obal Investment Resea

103、rch16 November 2023 19Goldman SachsOil Analyst Forecasts Appendix Our detai l ed monthl y suppl y-demand and i nventory bal ances are on the GS research portal here,and summari zed by Exhi bi t 21.Exhibit 21:We Forecast Annual Average 2024 Forecasts for Brent and WTI of$92 and 87 Per Barrel BrentWTI

104、2023837820249287202592884Q2384801Q2486822Q2492883Q2495904Q2494891Q2592882Q2592883Q2592884Q259288Nov-238176Dec-238379Jan-248480Feb-248682Mar-248884Apr-249086May-249288Jun-249489Jul-249590Aug-249591Sep-249590Oct-249490Nov-249489Dec-249389GS Forecasts Source:Gol dman Sachs Gl obal Investment Research16

105、 November 2023 20Goldman SachsOil Analyst Exhibit 22:GS Product retail price,wholesale flat price,and crack(vs Brent)forecasts Values represent realised and forecasted values of swaps expiries.Realised values in italics.Full monthly forecasts are available in the Appendix.(USD/bbl)RINNo2 DieselGasol

106、ineCostGSForwardsGSForwardsGSForwardsGSForwardsGSForwardsGSForwardsGSForwardsGSForwardsGSForwardsRetailRetailGS1Q22030303897974.293.786.12Q223434484843435858091121125.484.607.13Q22454914998985.164.197.84Q22111150

107、5094.063.697.91Q233412382824.403.497.92Q232222509783.943.697.43Q2327273434292940712786864.273.877.24Q2387395972213187894.363.584.61Q24862530211511

108、6290864.263.604.32Q2402631694844.253.914.23Q246293294834.293.813.94Q249427269.273.563.71Q25625222010992814.203.563.92Q25327599.093.814.

109、23Q25528094.153.724.64Q25622249992784.173.555.02022650504999995.004.067.22023335374183844.243.666.82024293393844.273.724.02025628102114

110、10792794.153.664.4(USD/gal)United StatesProduct cracks vs Brent crude(USD/bbl)Product flat price(USD/bbl)(USD/bbl)GasoilGasolineNW EuropeBrentCrude oilGasolineGasoilGasolineHeating oilGasolineHeating oilNW EuropeUS(New York)US(New York)Source:ICE,CME,Pl atts,EIA,Gol dman Sachs Gl obal Inv

111、estment Research16 November 2023 21Goldman SachsOil Analyst Disclosure Appendix Reg AC We,Daan Struyven,Cal l um Bruce,CFA,Yul i a Zhestkova Gri gsby and Bl ake Woods,hereby certi fy that al l of the vi ews expressed i n thi s report accuratel y reflect our personal vi ews,whi ch have not been i nfl

112、uenced by consi derati ons of the firms busi ness or cl i ent rel ati onshi ps.Unl ess otherwi se stated,the i ndi vi dual s l i sted on the cover page of thi s report are anal ysts i n Gol dman Sachs Gl obal I nvestment Research di vi si on.Disclosures Option Specific Disclosures Price target metho

113、dology:Pl ease refer to the anal ysts previ ousl y publ i shed research for methodol ogy and ri sks associ ated wi th equi ty pri ce targets.Pricing Disclosure:Opti on pri ces and vol ati l i ty l evel s i n thi s note are i ndi cati ve onl y,and are based on our esti mates of recent mi d-market l e

114、vel s(unl ess otherwi se noted).Al l pri ces and l evel s excl ude transacti on costs unl ess otherwi se stated.General Options Risks The ri sks bel ow and any other opti ons ri sks menti oned i n thi s research report pertai n both to speci fic deri vati ve trade recommendati ons menti oned and to

115、di scussi on of general opportuni ti es and advantages of deri vati ve strategi es.Unl ess otherwi se noted,opti ons strategi es menti oned i n thi s report may be a combi nati on of the strategi es bel ow and therefore carry wi th them the ri sks of those strategi es.Buying Options-I nvestors who b

116、uy cal l (put)opti ons ri sk l oss of the enti re premi um pai d i f the underl yi ng securi ty fini shes bel ow(above)the stri ke pri ce at expi rati on.I nvestors who buy cal l or put spreads al so ri sk a maxi mum l oss of the premi um pai d.The maxi mum gai n on a l ong cal l or put spread i s t

117、he di fference between the stri ke pri ces,l ess the premi um pai d.Selling Options-I nvestors who sel l cal l s on securi ti es they do not own ri sk unl i mi ted l oss of the securi ty pri ce l ess the stri ke pri ce.I nvestors who sel l covered cal l s(sel l cal l s whi l e owni ng the underl yi

118、ng securi ty)ri sk havi ng to del i ver the underl yi ng securi ty or pay the di fference between the securi ty pri ce and the stri ke pri ce,dependi ng on whether the opti on i s settl ed by physi cal del i very or cash-settl ed.I nvestors who sel l puts ri sk l oss of the stri ke pri ce l ess the

119、premi um recei ved for sel l i ng the put.I nvestors who sel l put or cal l spreads ri sk a maxi mum l oss of the di fference between the stri kes l ess the premi um recei ved,whi l e thei r maxi mum gai n i s the premi um recei ved.For options settled by physical delivery,the above ri sks assume th

120、e opti ons buyer or sel l er,buys or sel l s the resul ti ng securi ti es at the settl ement pri ce on expi ry.Regulatory disclosures Disclosures required by United States laws and regulations See company-speci fic regul atory di scl osures above for any of the fol l owi ng di scl osures requi red a

121、s to compani es referred to i n thi s report:manager or co-manager i n a pendi ng transacti on;1%or other ownershi p;compensati on for certai n servi ces;types of cl i ent rel ati onshi ps;managed/co-managed publ i c offeri ngs i n pri or peri ods;di rectorshi ps;for equi ty securi ti es,market maki

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132、an Sachs Austral i an Sel l-Si de Research I ndependence Pol i cy Statement are avai l abl e at:https:/www.gol scl osures/austral i a-new-zeal and/i ndex.html.Brazil:Di scl osure i nformati on i n rel ati on to CVM Resol uti on n.20 i s avai l abl e at https:/ dwi de/brazi l/area/gi r/i ndex.html.Wh

133、ere appl i cabl e,the Brazi l-regi stered anal yst pri mari l y responsi bl e for the content of thi s research report,as defined i n Arti cl e 20 of CVM Resol uti on n.20,i s the first author named at the begi nni ng of thi s report,unl ess i ndi cated otherwi se at the end of the text.Canada:Thi s

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