Goldman Sachs predicted this week that the price of oil could hit $100 a barrel this year — a trend that would likely increase pressure on the Biden administration to deal with an ongoing energy crisis.
In a note to clients, Goldman Sachs analysts said they expect Brent crude to top $100 a barrel in the third quarter of 2022. Prices could climb as high as $105 in the first three month of 2023, according to their projections.
Goldman noted a “surprisingly large deficit” in the oil market, with demand remaining high despite an increase in COVID-19 cases due to the Omicron variant. Oil inventories could hit their lowest level since 2000 by this summer, analysts have warned.
Experts have noted a number of factors contributing to the price spike. OPEC+ countries have resisted calls to boost production to meet growing demand as global economies reopen from the COVID-19 pandemic, while geopolitical tensions involving Russia and the United Arab Emirates have raised fears further market instability.
Earlier this week, the White House told Reuters that “the tools continue to remain on the table” to deal with oil prices.
“We continue to work with producer and consumer countries and these measures have had real effects on prices and ultimately tools remain on the table to allow us to address prices,” said a doorman. word of the National Security Council.
Oil prices hit their highest level in seven years earlier this week as geopolitical tensions heightened supply concerns. Brent crude futures rose above $87 a barrel, while West Texas Intermediate (WTI) crude futures rose above $85 a barrel.
Rising prices are a major concern for the Biden administration ahead of the 2022 midterms. Inflation hit 7% in December, the highest level in four decades.
The national average price for a gallon of gasoline was around $3.32 on Wednesday, according to AAA. Costs have risen significantly from the same day last year, when a gallon was around $2.39.
The trend is expected to worsen throughout this year. GasBuddy previously warned that prices could hit $4 a gallon by Memorial Day.
