Record holiday passenger flow helps boost oil prices - Goldman
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RECORD HOLIDAY PASSENGER FLOW HELPS BOOST OIL PRICES - GOLDMAN
After dropping more than 1% last week, Brent crude LCOcv1 was able to rebound to a four-week high at the start of the week, on concerns about escalation risk in the Israel-Hamas war as well as record U.S. air passenger flows, said Goldman Sachs.
The number of passengers that passed through Transportation Security Administration (TSA) airport check points over the Memorial Day holiday weekend was at a record high, said the firm, topping a prior peak from before the Covid-19 pandemic.
Goldman said the strong start to the traveling season "supports our expectations of record jet fuel demand this summer, and our forecast that global jet fuel demand will grow by 0.6mb/d this year."
But overall Goldman said their tracking of high-frequency data last week was mixed.
On the bullish side, the firm cited a dip in their Russia supply nowcast, the U.S. oil rig count still holding at a 4-month low, OECD Europe oil demand that topped their expectations, a further decline in net managed money positioning and lastly, their 36% model forecast for a production increase at the virtual OPEC meeting on Sunday.
On the bearish front, Goldman pointed to their U.S. lower 48 crude production nowcast slightly above their forecast in the first May estimate, their OECD commercial stocks nowcast turning back to a build and lastly, a slightly move down in the average crude basis and prompt timespreads.
(Chuck Mikolajczak)
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