Goldman gave an optimistic forecast on China's oil reserves. Will it support quotations?

China, according to Goldman Sachs estimates, will add about 500,000 barrels of oil per day to reserves over the next five quarters. This pace is significantly higher than recent figures. According to the market, demand from Beijing is helping to contain the decline in Brent crude, which is now trading around $66.4 a barrel. Despite this, Goldman is almost certain that there is a price drop of about $10 to come.

Goldman Sachs analysts estimate that China will continue to accumulate oil reserves at an accelerated pace this year and next. Over the next five quarters, China will add about 500,000 barrels a day to reserves, Dan Struyven, head of oil market research at the bank, said in an interview with Bloomberg.

Among the main factors prompting Beijing to build up reserves are lower global prices and the strategic priority of energy security, Bloomberg writes.

Goldman's forecast is more than double the pace of China's oil purchases according to recent market estimates. According to Gunvor Group, the country has been replenishing storage facilities by about 200,000 barrels a day in recent months. However, the actual volume of Chinese reserves remains unknown: data on strategic reserves is considered a state secret, Bloomberg noted. The situation is complicated by the fact that a significant part of oil comes from countries under sanctions - Russia, Iran and Venezuela, the agency added.

It was Chinese purchases that helped strengthen global demand and support prices, despite the risk of oversupply, experts said at the Asia-Pacific Petroleum Conference (APPEC) in Singapore this week, Bloomberg reports. At the time of publication of this text, Brent crude futures were up 0.7% to $66.8 per barrel, according to data from the Intercontinental Exchange.

However, Goldman looks at the market outlook with pessimism. Despite the expectation of active purchases by China, the bank still forecasts a decline in Brent oil prices next year to about $55 per barrel (mid-$50s), Bloomberg reports.

On Thursday, September 11, the International Energy Agency (IEA) predicted a record oil supply glut in 2026 as production grows much faster than consumption.

This article was AI-translated and verified by a human editor