Just less than a month ago, I warned that the strategic oil reserve was being destroyed by the Biden administration in a bid to force down gasoline and energy prices ahead of the midterm elections, and that the Biden family was personally profiting from the sale of our national reserves. The reserve is now down to 460,000 barrels.
Oil is selling at $100 per barrel as I type this, and gas prices are averaging $3.89 per gallon.
Just a week ago, Goldman Sachs was forecasting oil prices of $130 per barrel and gas prices of more than $5 per gallon by year’s end. These are the levels “at which we need to see sustained prices to eventually solve the market deficit,” said the company spokesman. Translated: prices for everything will be so high that demand will begin to drop off.
Except that isn’t where Sachs is stopping with their forecast. They are now forecasting that oil prices will continue to drop through the election, with a gradual rise to $125 per barrel by next summer. I wonder how accurate that will be, since 2020 saw them forecasting 2022’s oil prices to be $55 a barrel.
3 Comments
It's just Boris · August 23, 2022 at 11:37 am
Of course, very seldom are firms called to account for poor forecasting accuracy. And when they are, there’s almost always a plausible-sounding reason … but next time, they’re really sure they’re accounting for all factors!
It reminds me of companies that have a recurring series of one-time events to explain why they miss their earnings targets. Each event might be a one-off, yes, but the overall pattern is that they keep being surprised and failing to meet their goals.
Jonathan · August 23, 2022 at 11:41 pm
I thought the SPR was supposed to be downsizing over a number of years, with the eventual goal of going away?
I had an interview with them 4 years ago and they mentioned something like that, similar to the way the Feds got out of the helium business. I’ll have to look it up.
John Fisher · August 24, 2022 at 5:18 am
If Trump were still president, oil would be $55 / barrel and we all know it. They didn’t get the economics wrong, but did get the politics wrong.
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