高盛+2024年石油展望：歐佩克投資區(qū)間的強勁回報-英

16November2023|1:40PMESTOil

Analyst2024OilOutlook:RobustReturnsintheOPECRangennOilpricesaredownslightlythisyeardespitedemandexceedingouroptimisticexpectations.Non-coreOPECsupplyhasbeenmuch

strongerthanexpected,partlyoffsetby

OPECcuts.

We

believethatone-offfactorsdrove

thesupplybeats,concentratedintheUS(easingconstraints),RussiaandIran(policy).DaanStruyven+1(212)357-4172|daan.struyven@GoldmanSachs&Co.LLCCallumBruce,CFA+1(212)902-3053|callum.bruce@GoldmanSachs&Co.LLCWe

expectdemandgrowthtoremainsolidandcoreOPECsupplytoremainlowin2024.

We

thusexpecttheoilmarkettotightenatamoderatepace,butpreservesigni?cantsparecapacitytohandletighteningshocks,which

effectivelydelaysthesupercycle.YuliaZhestkovaGrigsby+1(646)446-3905|yulia.grigsby@GoldmanSachs&Co.LLCBlakeWoods+1(972)368-9739|blake.woods@GoldmanSachs&Co.LLCnnWe

believethatOPECwillensureBrentina$80-$100rangeby

leveragingitspricingpower,

witha$80?oorfromtheOPECput,anda$100

ceilingfromsparecapacity.

Whilehighernon-OPECsupplyorlower

GDParedownsideriskstoprices,we

estimatethatBrentwouldremaincloseto$80unlessOPECbecamelessassertive.Thisrangeshouldoffer

robustspot(15%

over

12M)

andcarry(12%)

returns,andwe

alsoseehedgingvalueagainstgeopoliticalsupplyshocks.We

expectthata0.7mb/dde?citwillraiseBrenttoa2024averageof$92/bbl.We

seesolid1.6mb/d

demandgrowthgivensolidGDPgrowth,structuralEMincreases,andajetfuelrecovery.USsupplygrowthissettoslowgivenfallingrigs,capitaldiscipline,andsoft

productivity.

We

assumeagradualunwindoftheextraSaudicut,andextendedgroupcutsbecausetheysupportrevenues.nnWhilethereisamplesparecapacityinoilproduction,we

expectre?ningtoremainstructurallytight.

We

thusexpectcomplexre?nerymarginstorise,especiallyfor

gasolineashighoctaneinputsgetscarceagaininsummer.Top

trades:OPEC

Range:Pro?t

ifJun24Brentisabove

75;shortput,longcallspread2024

De?cits:

Long

Aug24/Sep24BrenttimespreadSummer

GasolineTightness:LongSum24EuropeGasoline-BrentcrackThisreportisintendedfor

distributiontoGSinstitutionalclientsonly.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.For

Reg

ACcerti?cationandotherimportantdisclosures,seetheDisclosure

Appendix,orgoto/research/hedge.html.GoldmanSachsOilAnalystWeExpect

Oil

Prices

in

a

$80-100

Range$/bbl$/bbl140BrentPrice

with

GSForecast140Realized

BrentPriceForecast12012010080FuturesLikely

Range:

$80-10010080604020604020Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25Jan-26Source:ICE,GoldmanSachsGlobalInvestmentResearch16November20232GoldmanSachsOilAnalyst2024Outlook:RobustReturnsintheOPECRangeFollowingthelatestselloff,

Brentoilpricesaredownslightlyyear-to-date

despitedemandexceedingeven

ourown

optimisticexpectations.Infact,we

estimatethatoildemandgrowthof2.5mb/dthisyearisontrack

toexceedtheIEAandeven

ourownoptimisticexpectationsasofayearagoby

800

and500kb/d,respectively(Exhibit

1,leftpanel).

Thekey

surprisehasbeenmuch

strongerthanexpectednoncoreOPECproduction,partlyoffsetby

coreOPECsupplycuts.We

believethattwooneoff

factorsdrove

theupsidesurprisestosupplyoutsideofcoreOPEC,concentratedamongafew

countries.First,thepost-pandemiceasinginsupplyconstraintsfor

rigs,parts,andworkers,andrelatedef?ciencygainshave

providedaone-timeboosttoUSproductiongrowth.1

Second,supplyfromcertainsanctionedeconomieshasexceededexpectationsin2023as

Westernpolicymakersfoughttheenergy

crisiswithapricecapkeepingRussianbarrelsonthemarketwhilerisingIranianexports

unlocked

productivecapacity.Exhibit

1:

Upside

Surprises

in

2023

To

Oil

Demand

and

Non-OPEC

SupplySurprises

to

2023

Oil

Demand

and

Supply

Growth

(vs.

GS

End-2022

Expectations)kb/d600kb/dkb/dkb/d1,600Demand

GrowthSupply

Growth600

1,600Total

SurpriseTotal

SurpriseDownsideSurpriseUpsideSurprise50040030020010005001,2001,2008004000UpsideSurprise40080030040002001000OECD

DemandNon-OECD

DemandGlobal

DemandSource:IEA,Kpler,

JODI,EIA,NationalSources,GoldmanSachsGlobalInvestmentResearchAs

bothfactorsareunlikelytoboostsupplygrowthmuch

further,

we

expectsupplygrowthoutsidecoreOPECtoslowto1.5mb/d

in2024(vs.2.6mb/din2023),especiallyintheUS.

We,

however,

expectdemandgrowthtoremainsolid(1.6mb/d

yoy)

andcoreOPECsupplytoremainlow

in2024(-0.3mb/dyoy),

aswe

believethatOPEC’s

moreassertivemarketmanagementisstructural.Onnet,we

expectamoderate0.7mb/dde?citin2024,slightlywiderthanthe0.3mb/dde?citin2023.We

thusexpecttheoilmarket—whichisnow

onlyslightlytighterthanusualbasedonthelevel

ofOECDcommercialstocks—totightenatamoderatepace,butpreservesigni?cantsparecapacitytohandlenear-term

tighteningshocks.

Whilethisspare1Similarly,faster-than-expectedexecutiondrovethe2023supplybeatinBrazil.16November20233GoldmanSachsOilAnalystcapacityeffectively

delaysthenextoilsupercycle,itdoesn’t

necessarilypreventit,givenhow

tightlong-termsupplydriversoffuturetightness(e.g.capex)stilllook(Exhibit2).Exhibit

2:

WeExpect

the

Oil

Market

to

Tighten

in

2024

But

to

Preserve

Signi?cant

Spare

CapacitySource:IEA,Platts,OPEC,EIA,GoldmanSachsGlobalInvestmentResearch16November20234GoldmanSachsOilAnalystThe

OPEC

RangeWe

believethatOPECwillensurethatBrentoilpricesendupina$80-$100rangein2024by

ensuringamoderatede?citandleveragingitspricing

power.

Thisrangeshouldoffer

investorsrobustspotandcarryreturnsinmostscenarios.

Atthesametime,wealsoseehedging

valueinoilinriskscenarioswithgeopoliticallydrivensupplydisruptions,whereriskassetsperformpoorly.Exhibit

3:

WeExpect

Oil

Prices

to

Stay

in

a

$80-100

Range$/bbl140$/bbl140BrentPrice

with

GSForecastRealized

BrentPriceForecast1201008012010080FuturesLikely

Range:

$80-100606040402020Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25Jan-26Source:ICE,GoldmanSachsGlobalInvestmentResearchA

$80

Floor

Under

BrentWe

believethatBrentisunlikelytosustainablydropbelow$80/bblnextyearfor

threereasons.First,theOPECputislikelytostayinplace.

ThecutsinOctober2022,

AprilandJune2023,andtheSeptemberextensionoftheextraSaudicutsuggestthattheOPECputsitsat$80to$85/bbl(Exhibit

4).

Whiletheriseinsparecapacityimpliesthatthisputislessstrongthanayearago,we

believethatasustaineddropbelow$80wouldlikelyleadOPEC+tobringback

barrelsmoreslowly.Second,theglobaleconomyisapproachingasoft

landing,wherecorein?ationreturnstotargetwithlimiteddamagetolabororoildemand.Third,USnetpublicandprivatedemandfor

oilriseswhenpricesfall.

TheUSDepartmentofEnergyreiterateditscommitmenttoreplenishtheSPRasanincrementalprice-sensitivebuyer,

andaimstopurchaseupto6mbofoilinJanuaryatWTIof$79/bblorbelow.Andwe

estimatethata10%

oilpricedecreaselowersUSliquidssupplyby

around1%or200kb/d.16November20235GoldmanSachsOilAnalystExhibit

4:

The

OPEC

Put

Currently

Appears

to

Sit

Around

$80

to

$85/bbl$/bbl$/bbl100BrentOilPrice

onFriday

Preceding

OPECProduction

Cut(orExtension

ofCut)10090807060504030201009080706050403020100Mar

Jun

Nov

Mar

Mar

Mar

Dec

Sep

Feb

Dec

Sep

Dec

Oct

Dec

Sep

Nov

Dec

Dec

Mar

Apr

Oct

Apr

Jun

Sep30

24

26

23

29

17

12

24

10

10

11

14

24

17

28

30765952451998

1998

1998

1999

2000

2001

2002

2003

2004

2004

2006

2006

2008

2008201620162018

2019

2020

2020

2022

2023

2023

2023OPEC

AnnouncementDateGreenbarsrefertotheunilateralSaudicutoritsextension.Source:OPEC,ICE,GoldmanSachsGlobalInvestmentResearchA

$100

Cap

on

BrentWe

believethatBrentisunlikelytosustainablyexceedaround$100/bblnextyearforthreereasons.First,highsparecapacityof6mb/dlimitstheupsidetolong-datedoilprices(Exhibit

5,left

panel).

Withamplesparecapacity,long-datedpricesdonotneedtoincreasetoencouragefastergrowthinlong-cycleprojects,andwe

stillestimatethefairvaluefor36mBrentat$74/bbl.Second,OPECisunlikelytopushtimespreadstoextremelevels,which

wouldreducelong-termresidualdemandfor

OPECbarrels.Speci?cally,we

?ndthatthe2022energycrisisboostedlong-runnon-OPECsupplyviaareturntooffshoregrowth,andloweredlong-runoildemandviainvestmentinalternativestooil,includingEVs.Third,thedestockinginChinacrudeinventoriesandthehittocrudedemandfromerodingre?nerymarginsfollowingtheriseinBrenttonearly$100/bblinlateSeptemberillustrateprice-elasticcrudedemandfromChinaandre?nersasakey

balancingmechanism.16November20236GoldmanSachsOilAnalystExhibit

5:

Elevated

Spare

Capacity

and

China

Destocking

Put

a

Cap

on

Oil

PricesOPEC

exIran

Spare

Capacity$/bbl70mb60mb/d12mb/d12108Brent:

15-Day

Lag(left,inverted)1087580859095China

Inventories:60-Day

Change(right)402006644-20-4022HighPriceChinaDestocking00Jan-70Jan-80Jan-90Jan-00Jan-10Jan-20100Jan-23-60Mar-23May-23Jul-23Sep-23Nov-23Source:Platts,IEA,OPEC,EIA,Kpler,

ICE,GoldmanSachsGlobalInvestmentResearchAs

Brentpricesarelikelytorecovertotheupperhalfofthe80-100

range,oilshouldoffer

robustspotreturns.

We

alsobelievethatOPECwillpursuebackwardation,andanticipatethatanelevated12%

rollorcarryreturnwillbealargecontributortoourforecastofa36%totalreturnfor

Brentover

thenext12M.

We

nextreviewthekeydriversofourforecastofamoderatede?citin2024.Exhibit

6:

WeForecast

Robust

Returns

From

Investing

in

Brent

Futures

From

Price

Appreciation

and

RollReturnPercent40%PercentDecomposition

ofBrentReturns40%35%30%25%20%15%10%5%CollateralReturnRollReturn35%30%25%20%15%10%5%PriceReturnTotal

Return0%0%3m6m12mSource:GoldmanSachsGlobalInvestmentResearch16November20237GoldmanSachsOilAnalystA

Moderate

De?cit

in

2024We

expectthatrobustdemand,slowingUSsupplygrowth,andlower

OPECsupplyforlongerwillresultinamoderate0.7mb/d2024de?cit.

As

aresult,we

expectthatgentleinventorydeclines(Exhibit

7)willraisetimespreadsandBrenttoapeakof$95/bblbyAugust2024,withthe2024averageat$92/bbl.2Exhibit

7:

WeForecast

Gentle

Inventory

Declines

in

2024Source:IEA,GoldmanSachsGlobalInvestmentResearchDe?cit

Driver

#1:

Robust

Demand

GrowthWe

seesolid1.6mb/d

oildemandgrowthin2024givensolidglobalGDPgrowth,structuralEMincreases,andanongoingjetfuelrecovery.Oureconomistsforecastabove-consensusglobalGDPgrowthof2.6%basedonstrongincomegrowth,asmallerdragfrommonetaryand?scaltightening,arecoveryinmanufacturingactivity,andanincreasedwillingnessofcentralbankstodeliverinsurancecuts.ThisrelativelyoptimisticviewonGDPisakey

inputintoouroildemandmodels.EMswithstructurallypositivedemandtrendsdriveourforecastof1.4mb/d

2024Q4-Q4growth,includingChina(450kb/d),India(300kb/d),theMiddleEast(150kb/d),andothernon-OECD

Asia(200kb/d).2We

havewidenedour

WTI-Brentdifferentialslightlyfrom$3.8/bblto$4.4/bbl,re?ectingtherallyindirtyfreightmarketsonapotentiallystricterenforcementoftheRussianpricecap.16November20238GoldmanSachsOilAnalystExhibit

8:

WeLook

for

Firm

2024

Oil

Demand

Growth

in

EMsmb/dmb/d3Cumulative

Change

inOilDemand

Since

2023Q43221100-1-2-3-4-1-2-3ChinaIndiaMiddle

EastRest

ofNon-OECDRest

ofOECDUSOECD

EuropeTotal

Change

in

Oil

Demand-4Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q42022202320242025Source:IEA,Kpler,

JODI,EIA,NationalSources,GoldmanSachsGlobalInvestmentResearchByproduct,we

forecastanotheryearofsolidjetfueldemandgrowthof0.6mb/d,andapickup

ingrowthfor

thepetchemorientedLPGandnaphthaproductsto0.5mb/d(Exhibit

9).

We

stillseesomeroomfor

post-pandemicrecoveryininternational

Asia?ights,withglobaljetfueldemandin2023Q3still0.7mb/dbelowits2019Q3

level.

Weexpectdemandfor

petchem-orientedproductstore-acceleratetowardsitssolidstructuraltrendasthedestocking

headwindfadeswithanormalizationininventory-to-salesratiosandinterestrates.Exhibit

9:

WeExpect

Jet

Fuel

and

Petrochemical

Products

(LPG

&

Naphtha)

to

Drive

Solid

2024

DemandGrowth

of

1.6mb/dmb/d3.0mb/d3.0OilDemandGrowthbyProductOtherProductsGas/DieselOil2.52.01.51.00.50.0-0.52.52.01.51.00.50.0-0.5MotorGasolineLPG&

NaphthaJet

Fuel&

Kerosene2015-192022202320242025Average

ChangeSource:IEA,JODI,EIA,NationalSources,ICIS,Kpler,

HaverAnalytics,ICE,GoldmanSachsGlobalInvestmentResearch16November20239GoldmanSachsOilAnalystDe?cit

Driver

#2:

Slowing

US

Supply

GrowthWe

expectsupplygrowthoutsidecoreOPECtoslowdownto1.5mb/d

in2024(from2.6mb/din2023).We

especiallylookfor

amoderationintotalliquidssupplygrowthintheUSto530kb/d(vs.1.4mb/d),

andBrazilto220kb/d(vs.0.4mb/d).Despitethisslowdown,the

Americasaresettocontinuetodriveglobalsupplygrowthin2024withaccelerationsinGuyana(180kb/d),andCanada(150kb/d).Exhibit

10:

WeForecast

a

Moderation

in

US

TotalLiquids

Supply

Growth

to

0.5mb/d

in

2024mb/d1.5mb/d1.5USLiquids

Supply

GrowthOtherCrude1.31.00.80.50.30.0-0.31.31.00.80.50.30.0-0.320212022202320242025Source:IEA,EIA,GoldmanSachsGlobalInvestmentResearchWe

expectUSliquidssupplygrowthtoslowfor

threereasons.3First,theUSoilrigcounthascontinueditssurprisingdescent,andisnow

down21%fromthelate2022peak.3OnaQ4-Q4basis,our2024USsupplygrowthforecastis360kb/dwithcontributionsof250kb/dfromcrude,and130kb/dfromNGLs.16November202310GoldmanSachsOilAnalystExhibit

11:

The

US

Rig

Count

Is

Down

21%

Since

Late

2022;

Public

Producers

Are

Signaling

a

Production

Slowdownkb/d250US

Crude

Production

YoY

GrowthbyPublic

Independent

E&Ps

Under

GS

Coveragekb/d250OtherDiamondback2001501005020015010050EOG

ResourcesPioneerConocoPhillips00202320242025EstimateEstimateEstimateSource:BakerHughes,HaverAnalytics,Companydata,GoldmanSachsGlobalInvestmentResearchSecond,USproducersremaincapitaldisciplined.USpublicindependent?rmsarestickingtothemoderatesingledigitgrowthtargetsannouncedin2020-2021.

Ourenergyequityanalystsexpectcrudeproductiongrowthby

theindependentUSE&PsunderGScoveragetoslowfromaround235kb/din2023to135kb/din2024(Exhibit

11,rightpanel).Reinvestmentrates—capexasashareofoperatingcash?ow—ofpublicproducersremainina40-60%range,wellbelowthehistoricalaverage(Exhibit

12,leftpanel).Third,underlyingwellproductivityinthePermianbasin(thekey

USgrowthengine)hasstoppedincreasing,re?ectinganoffsetbetweendeterioratingrock

qualityandimprovingtechnology(Exhibit

12,rightpanel).Exhibit

12:

US

Public

Producers

Remain

Capital

Disciplined;

Underlying

Well

Productivity

Has

Stopped

IncreasingReinvestmentRate:

Capex

asa

Share

of

Operating

Cash

Flowof

USPublic

Oil

ProducersPermian

Wells:

Average

First6

MonthProduction

Adjusted

by

Lateral

Lengthkb/1,000ft14kb/1000ft14Percent160Percent160Estimate1210812108140120100801401201008066606044404020202200002000200420082012201620202024Source:HaverAnalytics,Companydata,Enverus,GoldmanSachsGlobalInvestmentResearch16November202311GoldmanSachsOilAnalystDe?cit

Driver

#3:

Lower

OPEC

Supply

for

LongerWe

believethattheOPEC+supplycutssincelate2022re?ectastructuralshift

toamoreassertiveapproachofkeepinginventorieslow,

andpursuingbackwardation.4Becauseofthereducednon-OPECsupplyresponsetoproductioncuts,we

estimatethatOPECgroupcutsnow

boostSaudioilpro?ts.

As

aresult,Saudi

Arabiaandtheother8OPEC+countries,which

cutproductionby

1.7mb/d

in

April,arelikelytokeeptheirgroupcutfullyinplacein2024.We

assumethatSaudi

Arabiaunwindstheextra1mb/dunilateralcutonlygraduallystartingin2024Q3by

0.25mb/deverytwomonthsbecauseitsappearsdeterminedtolower

inventoriesandsupportelevatedfundingneeds.Ourforecastfor

low

OPECsupplyisalsoconsistentwithourstatistical

?ndingthatthegroupisinnorushtoboostproductionbecausecommercialOECDstocks

remainonlyslightlybelowtheirhistoricalaverage.Exhibit

13:

Lower

Saudi

Crude

Supply

For

LongerSource:OPEC,GoldmanSachsGlobalInvestmentResearch4PursuingbackwardationisgenerallyinOPEC’sinterestforthreereasons.First,itpreservestheoptionvalueofsparecapacity,whichalsodiscouragesnon-OPECinvestmenent.Second,OPECcangeneratelargermovesinpriceswithagivenadjustmentinproductionwheninventoriesarelow.

Third,whileOPECistoolargetosellitsproductionforwardandisthusexposedtospotprices,shaleproducersoftensellatforwardpricesthroughhedging.16November202312GoldmanSachsOilAnalystStress

Testing

the

80-100

RangeWe

nextstresstestourviewthatoilpriceswillbeina80-100

rangein2024.

Weestimatetheeffect

ofthreekey

risksonour2024Q4Brentforecastof$94/bblusingourpricing

framework.BasedonourassessmentofthelikelyOPECresponse,we

concludethatBrentislikelytoremaininorclosetoour80-100

rangeinmostriskscenariosunlessOPECbecamesigni?cantlylessassertive(downsidepricerisk),orifOPECispreventedfromdeployingitssparecapacity(tailupsidepricerisk).nnnModerate

recession

(-$17/bbl

under

OPEC

response):ThisscenarioassumesamoderateOECDrecessionstartingin2024Q1,lasting4quarters,withspilloverstonon-OECDeconomies.5

Inthisscenario,we

thinkthatkey

OPEC+countries—SaudiArabia,Russia,UAE,Kuwait,

andIraq—wouldlikelynotgraduallyraiseproduction(asourbaselineassumes).Ifoutputfromthese5countriesstays?at

atits2023Q4level,thenBrentwouldbe$17

lower

thaninourbaseline,andreach

$77/bblin2024Q4.IfOPEC+outputweretoriseinlinewithourbaselinesupplyoutlookdespitearecession,then2024Q4Brentwouldbe$31lower

at$62/bbl.Non

OPEC

supply

beats

again

(-$12/bbl

under

OPEC

response):ThisscenarioassumesthatglobalsupplyexcludingcoreOPEC,Iraq,andRussia,Iranbeatsourexpectationsin2024by

thesamemagnitudeasin2023.Inthisscenario,extensionsoftheextraSaudicutthrough2024andthegroupcutannouncedin

April2023through2025Q1appearlikely.

Onnet,we

estimatethatBrentwouldthenbe$12lower

thaninourbaseline,andreach

$82/bblin2024Q4.IfOPEC+outputweretoriseinlinewithourbaselinesupplyoutlook,we

estimatethat2024Q4Brentwouldbe$19

lower

at$74/bbl.Supply

disruptions

(+$5/bbl

under

OPEC

response):Thisscenarioassumesa0.5mb/driseinunplannedproductiondisruptionstothe2011-2023

averageof1.8mb/d

startingin2024Q1.6

Inthisscenario,we

thinkthatSaudi

Arabiamay

startunwindingitsextracutin2024Q2(vs.our2024Q3baseline).Onnet,we

estimatethatBrentwouldbe$5higherthaninourbaseline,andreach

$99/bblin2024Q4.Combiningthesedisruptionsandourbaselinesupplypathwouldimply$8/bblofupsidewith2024Q4Brentat$102/bbl.5Itassumesapeak4%hittothelevelofOECDGDP(relativetotheGSbaseline),whichisslightlymoremoderatethanthemedianhistoricalrecessioninG10

economies,andapeak2%hittonon-OECDGDP.We

useEIAestimatesofglobalunplanneddisruptionproductionsexcludingIran,Russia,Norway,NorthSea,andtheUK.

TheEIAestimatesthelargest2023Q3disruptionsforIraq,Nigeria,andLibya.616November202313GoldmanSachsOilAnalystExhibit

14:

The

OPEC

Response

Is

Likely

to

Keep

Prices

in

a

80-100

Range$/bbl$/bbl1202024Q4BrentPrices120OPECResponseNo

OPECResponseGS

Likely

RangeFutures100806040200100806040200Moderate

RecessionNon-OPEC

Supply

BeatsSupplyDisruptionsSource:ICE,HaverAnalytics,GoldmanSachsGlobalInvestmentResearchWhilewe

seeaseveresupplydownsideriskscenario,such

asapotentialinterruptionoftradethroughtheStraitofHormuz,ashighlyunlikely,

theresultingrallywouldlikelybesizable.Speci?cally,we

estimatethatoilpricesinthistailscenariowherecoreOPECcannotdeployitssparecapacityinitiallyrise20%above

ourbaselineinthe?rstmonthofinterruption,andmay

temporarilydoubleinthemuch

lesslikelyscenarioofanextendeddisruption.16November202314GoldmanSachsOilAnalystRe?ning’s

Catch-22Whilethereisamplesparecapacityinupstreamcrudeoilproduction,thedownstreamre?ningsystemremainsthetightest

sector

of

the

oil

industry,

implyingpersistentlyelevatedre?nedproductmarginsandtimespreads.Structural

TightnessWe

estimatethatthecurrentglobalre?ningutilizationrateof85%sitsinpercentile

90of

its

historical

distribution(Exhibit

15),and3-4p.p.above

themid-cyclenorms.Exhibit

15:

The

Re?ning

System

Is

Structurally

TightSource:IEA,BP,

IIR,OGJ,GoldmanSachsGlobalInvestmentResearchThisstructuraltightnessre?ectsfourkey

factors.First,7mb/dofdisruptions

and

pandemic-related

closures

sincethelate2010s

havedepressedre?ningcapacity.Second,demandfor

re?nedproductshasreached

an

alltime

high.

Third,morefrequentweather-related

disruptions,andthedivergencebetweenthequalityofcrudesupplyandthetypeofre?nedproductsindemandarestraining

the

system

inunusualways.Fourth,thecombinationofelevatedlong-run

demand

uncertaintyandtheverylongcycleofre?ninginvestmentshaslimitedinvestmentinnew

re?neries.Infact,weestimatethatthemedianDMre?neryisnow

50yearsold,withpayback

periodsofmorethantwodecades.

Whilehighpricesusuallytendtocurehighprices,thedurationmismatchbetweeninvestmentandreturnsprecludessuch

anaturalrebalancing.Thisdynamic–re?ning’sCatch-22—willlikelycementare?ningbullmarketuntilEV-penetrationscalessigni?cantly.Againstthisstructurallytightre?ningbackdrop,we

expectonlymodestincrementaleasingover

2024-2025.

Although1.8/1.4mb/d

ofnetcapacityadditions(revised+0.1/+0.1)stilloutweighthe1.4/0.9mb/d

growthexpectedinre?nedproductdemand(+0.1/+0.4)over

thisperiod,we

now

lookfor

lessincrementaleasingthanpreviously.Andeven

underourforecastofan84.6%utilizationratein2025,thesystemremains16November202315GoldmanSachsOilAnalystvulnerabletofurtherdelaysincapacityadditionsthatremainconcentratedinEMswithahistory

of

delays

and

operational

challenges.The

combinationofre?ningtightnessandthedistortionofdemandacrossproductsimpliesongoing

divergence

in

re?nery

margins.

We

expectcomplexre?nerstoberewardedfor

productionofpremiumproductsinhighdemand(gasoline,diesel),whilesimplere?nersearnlower

marginsonproducingsurplusnaphtha(apetrochemicalfeedstock)andfueloilinlow

demand.

We

thereforethinkthattoday’s

low

complexre?ningmargins(belowthe2015-19

average)inmultipleregionsarenotsustainableandwillpick

up.Exhibit

16:

WeExpect

a

Return

to

a

Divergent

Margin

Environment

that

Rewards

Complex

Re?nersSimpleSingaporeandcomplexUSGulfCoastre?ningmarginsadjustedforslate,yield,freight,processingcosts(USD/bbl).Dashedlinesare2015-19average35302520151050-5-10Simple

SingaporerefiningmarginsComplexUSGCrefining

marginsSource:ICE,CME,DME,Platts,Re?nitivEikon,GoldmanSachsGlobalInvestmentResearchHigher

Summer

Gasoline

Re?nery

MarginsWe

areconstructive

on

gasoline

re?nery

margins,andneutralondieselmargins.Globalgasolinere?nerymarginshave

bouncedinrecentweeksfromcostsupport,assistedby

yield-switchingtodiesel,aswe

hadexpected.

Arecoveryincurrentlydepressed

gasoline

positioning

islikelytofurtherboostgasolinere?nerymargins.We

maintainourcal24/25gasoline-Brentcrack

forecastsat$13/10

(NWEuropeanEBOB)and$18/16/bbl(USRBOB),respectively,asthebearishincorporationofthelighterslate(increasinggasolinesupply)offsetsbullishinventorydeclines.Ourgasolinere?nerymarginsforecastsremainwellabove

the2019

averagesof$7/8/bbl,respectively.

We

thuscontinuetorecommendlongpositionsinsummergasolinemargins,whenwe

expectoctaneconstraintstoonceagaindictatesigni?cantpriceupside.

We

prefertoexpresslengthinEuropeanproductcracks,givenourcontinu