(Bloomberg) -- The White House’s push for releases of oil from national reserves is already fully priced into the market following the drop in crude prices in recent weeks, according to Goldman Sachs Group Inc.
The U.S. is likely to sell at least 20 million to 30 millions barrels of crude from the Strategic Petroleum Reserve and reports suggest a combined 30 million barrels will be released by other countries, the bank said in a note dated Nov. 18. But the decline in prices since late October reflects market expectations for more than 100 million barrels, Goldman said.
“Such a release would only provide a short-term fix to a structural deficit,” analysts including Damien Courvalin and Callum Bruce said in the note. “In fact, if such a release is confirmed and manages to keep oil prices depressed in the context of low trading activity into year-end, it would create clear upside to our 2022 price forecast.”
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The bank has a price forecast of $85 a barrel for Brent in the final quarter of this year, and said in September that the global crude benchmark would average $81.30 in 2022. Brent is currently trading near $82, having fallen about 5% from a peak in late October.
President Joe Biden has been talking for several weeks about the possibility of joint releases from reserves after OPEC+ rebuffed calls for it to restore supply more quickly. China said Thursday that it would release some crude from its stockpiles, although it didn’t provide any details on volumes or timing. The U.S. still hasn’t confirmed its own release.
India and Japan have both said in recent days they won’t sell crude from their national stockpiles. Those two countries, as well as South Korea and the International Energy Agency are unlikely to participate in a joint release, Goldman said in the note.
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