The world’s appetite for oil and gasoline is growing faster than many forecasters expected, putting Brent crude on pace to top $70 a barrel, Goldman Sachs says.
The investment bank says oil demand grew by 1.55 million barrels per day in January alone, a strong result despite a tough comparison with high consumption last year. For the first quarter, Goldman expects global oil demand to grow by nearly 2 million bpd, trouncing its earlier forecast for 1.1 million bpd and driven by consumption in emerging markets.
“We continue to believe that ongoing macro and oil demand concerns are overdone,” Goldman analysts said in a research note on Thursday.
The strong demand will likely push Brent crude, the international benchmark for oil prices, above $70 per barrel. The rally has already outstripped Goldman’s prior view that Brent would peak at $67.50 in the second quarter. Brent hit a 2019 high above $68 on Thursday.
It will also keep growth for the full year on pace for Goldman’s target of 1.45 million bpd, making the bank more bullish than most forecasters.
In China, a key engine for oil demand, oil consumption grew by 340,000 bpd in January and February, according to Goldman. The Chinese also stocked away 360,000 bpd, a buildup that runs counter to seasonal trends, the bank says.