(Reuters) – The underlying outlook for commodity prices is strong as metals and energy stocks continue to fall despite already at low levels, according to Goldman Sachs (NYSE:), which is classifying the recent price decline as long-term. Opportunity to buy to order.
The bank said in a note on July 7 that commodity markets were in oversold territory, decoupled from supply and demand fundamentals.
“Global mobility remains strong and continues to recover strongly in China, with the oil market reporting a deficit of 1 million barrels per day. Oil premiums in the US and Europe remain historically high, while physical metals order books remain strong,” the bank said.
The bank said that commodities will overcome recession risks in the United States and Europe in the next 12 months “thanks to China’s broad counter-cyclical stimulus”.
It forecasts returns of 34.4%, 30.4%, and 36.9% in commodities over three, six, and twelve months, respectively in the S&P/GSCI Goldman Sachs (GSCI) Commodity Index, adding that commodity premiums are “a great big hedge (versus prospects).”
“Allocation to a real, real asset such as a commodity remains essential to protect a multi-asset portfolio.”
According to the bank, industrial minerals achieved a return of 57.2% in a 12-month period, followed by precious metals by 48%, energy by 40.7%, and then agriculture by 24.4%.
On energy, Goldman reiterated his view that the oil market is in a structural deficit.
“This shortfall is likely to continue at current oil prices, given the expected moderate recovery in Chinese demand and the decline in Russian exports (in the context of EU sanctions),” the bank said, predicting that the decline in Russian exports would accelerate from 0.3 million. to 1.5 million barrels per day for the first quarter of 2023.
Oil prices rose on Friday but headed for a weekly decline as recession fears overshadowed supply shortages. Slowdown fears affected most commodities, with the price hitting a 20-month low this week. [MET/L] [O/R]
(Reporting by Urban Varghese in Bengaluru; Editing by Jonathan Otis, translated by Thomas Cobos)
“Beeraholic. Friend of animals everywhere. Evil web scholar. Zombie maven.”
More Stories
Room Mate will collaborate with two major international hotel companies
Chipazo lottery results: Who are the new millionaires?
The largest bank in America says goodbye to Wall Street after 150 years