Goldman Sachs: Huge Spare Capacity Weighs on Oil Prices

Spare oil production capacity at the highest quartile in history is weighing on Brent crude prices, and time spreads have looked undervalued since the summer, according to Goldman Sachs. The expectations for a large surplus next year are also likely weighing on the deferred time spreads, the investment bank said in a recent note. “Nevertheless, we believe neither currently low inventory levels nor our expected 2025 surplus of 0.37mb/d warrant the oversupply priced in the futures curve,” the Wall Street bank’s analysts wrote. “Deferred…