Due to transportation and refrigeration demand, Goldman Sachs latest forecast predicts that oil prices will rise significantly this summer. Goldman Sachs analysts predict that Brent crude oil prices will rise to $86 per barrel, an increase of nearly 7% from current levels, and maintain a price range forecast of $75 to $90 per barrel for 100-300 billion yuan product revenue.

Goldman Sachs Group's managing director and head of oil research, Daan Struyven, wrote:"We expect healthy consumption and robust demand for transport and cooling during the summer to drive significant supply gaps in the third quarter."

Since April, oil prices have been on a downward trend. Recently, OPEC+ has said it will start to lift some of its voluntary output cuts from October, which has exacerbated the decline in oil prices.

"We still believe that $75 per barrel is the floor for Brent crude oil prices. First of all, the actual demand for crude oil, including the demand from China and the United States to replenish strategic petroleum reserves (SPR), often rises when prices fall," analysts wrote. Last week, the US Department of Energy announced its intention to purchase an additional 3.1 million barrels, in addition to the recently purchased 3 million barrels for SPR.

Last week, JPMorgan analysts also said that the recent decline in oil prices is likely to be temporary. Natasha Kaneva, JPMorgan's global head of commodity strategy, wrote in a report last Thursday:"The summer inventory reduction should be sufficient to push Brent crude oil back into the $80-$90 range in September."

JPMorgan analysts predict that the average price of Brent crude oil will drop significantly from $83 per barrel in 2024 to $75 per barrel in 2025. Goldman Sachs maintains its target for next year at an average of $82 per barrel.

It is worth mentioning that just two weekends ago, after the OPEC+ production meeting, Goldman Sachs said that the outcome of the meeting was bearish for oil prices and predicted that Brent crude oil might fall below the $75-$90 range. This view was later attacked by the Saudi energy minister. In just one week, Goldman Sachs' view has reversed to a bullish outlook for oil prices.

Due to OPEC+ providing forward-looking guidance on the possibility of some crude oil supply returning to the market, oil prices experienced a rollercoaster ride last week. However, a key reason behind the rebound in oil prices is believed to be more technical than fundamental: position data suggests that the selling of Brent crude oil has likely peaked.

As shown in the figure below, the reason for the sharp drop in oil prices last week was that the net long bets on Brent crude oil price set a weekly record since ICE began publishing the data more than a decade ago. This clearly shows the surge in bearish sentiment and the level of technical selling pressure on crude oil. Data on similar positions for US diesel futures also fell sharply.

However, oil bulls will tell you that despite the relatively low spot market, with the recovery of consumer fuel demand, the situation should improve in summer, just like Goldman Sachs mentioned earlier.

As foreign media reporter Alex Longley pointed out, the key calendar spread that measures market health has also shown signs of bottoming out in the past week or so. As positions were generally overly bearish prior to last Tuesday's data, the rebound in oil prices from the low point could indicate some bearish sentiment has dissipated, and "we have reason to believe that the doldrums of oil prices are finally coming to an end."