Goldman Sachs follows the blog on oil prices

Oil markets


trading floor.pngThe blog is awarding itself and fellow-blogger John Richardson a pat on the back this morning. The reason is that investment bank Goldman Sachs, the largest player in commodity markets, has completely reversed its analysis of oil markets. They now accept our view that there is no fundamental reason for oil prices to be at today’s high level.

The blog discussed this issue at length in its January 2011 White Paper, Budgeting for Uncertainty, and has maintained its view ever since. This has sometimes been a lonely position, as Goldman’s voice is very strong in the markets. However, on Thursday, Goldman revealed they had changed their mind:

“The U.S. shale oil boom, which saw the country’s oil production rising to multi-decade highs, caught many industry watchers and specialists by surprise and has dramatically reshaped the global oil flows over the past few years”

By coincidence, the blog has this week published another article on the subject in ICIS Chemical Business, which includes the sentence:

“In oil markets, there have been no major shortages of product on the scale of the 1979 OPEC embargo, or similar, to cause prices to rise. And production has actually been rising. US output, for example, has reversed years of decline, and is now back at 1996 levels. Similarly, inventories in the US and elsewhere have often been at near-record levels.”

The blogs are delighted that that their readers have been forewarned of the real position all along. They cannot change the course of events. But at least, as with the collapse of Bear Stearns, the 2008-9 recession and September 2008 financial collapse, China’s slowdown and other major issues, they can keep readers ahead of the game.


US companies' revenue starts to fall, as higher oil prices bite


Whisper it quietly, so as not to disturb the world’s central bankers as th...

Learn more

Global auto sales growth slows


The impact of sustained high oil prices is becoming very clear in global auto ma...

Learn more
More posts
Oil prices start to reconnect with coal and gas

Oil prices are finally starting to reconnect with other fossil fuel prices, as the chart shows.  It...

Oil markets hit perfect storm as coronavirus cuts demand

Former Saudi Oil Minister Sheikh Yamani’s warning in 2000 looks increasingly prophetic today: ...

Oil markets hold their ‘flag shape’ for the moment, as recession risks mount

Oil markets can’t quite make up their mind as to what they want to do, as the chart confirms. ...

Oil market weakness suggests recession now more likely than Middle East war

Oil markets remain poised between fear of recession and fear of a US attack on Iran. But gradually i...

Recession risk rises as Iran tensions and US-China trade war build

Oil markets are once again uneasily balanced between two completely different outcomes – and o...

Déjà vu all over again for oil markets as recession risks rise

Back in 2015, veteran Saudi Oil Minister Ali  Naimi was very clear about Saudi’s need to adop...

Oil prices flag recession risk as Iranian geopolitical tensions rise

Today, we have “lies, fake news and statistics” rather than the old phrase “lies, ...

Saudi oil policy risks creating perfect storm for Aramco flotation

Good business strategies generally create good investments over the longer term. And so Aramco need...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more