Increasing Covid fears in China and a lack of clarity over the Group of Seven nations’ plan to cap Russian oil prices led Goldman Sachs to reduce its oil price projection for the fourth quarter of 2022 by $10, to $100 per barrel.
“The market is right to be anxious about forward fundamentals, due to significant Covid cases in China and a lack of clarity on the implementation of the G7′s price cap,” economists at Goldman Sachs stated in a report, adding that further shutdowns in China would have the same effect as the 2 million barrels per day of reduced production enforced by OPEC+.
China reported three Covid deaths over the weekend, the country’s first since May of this year.
With hundreds of new cases being reported each day, Beijing, the capital of China, has recently increased their Covid restrictions.
Economists have also noted that the potential for further lockdowns in the largest oil importer in the world will further reduce demand for oil.