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The next U.S. president will have a very limited set of tools to materially boost oil supply in the United States, according to investment bank Goldman Sachs.
Whoever wins the presidential election in November will have to contend with low stocks in the Strategic Petroleum Reserve (SPR). Moreover, any regulatory easing on the U.S. oil industry – expected if Donald Trump wins – would only have an impact on the longer-term U.S. crude oil production, not on immediate supply, analysts at Goldman Sachs wrote in a note carried by Reuters.
Earlier this week, Goldman Sachs Research said in an analysis that the Permian, the biggest U.S. oil basin, is headed for slower – but still robust – growth.
“The annual average production growth in the maturing Permian basin is likely to gradually decline from an exceptionally strong 520,000 barrels per day in 2023 to 340,000 barrels per day this year, and to a still robust 270,000 barrels per day in 2026,” Yulia Grigsby, an energy economist in Goldman Sachs Research, wrote.
Even if the Permian oil production growth is slowing, it will remain robust through 2026, due to drilling and completion efficiency and price forecasts of $79 per barrel WTI Crude this year and $76 a barrel WTI next year. These price forecasts are modestly above Goldman analysts’ estimate of $74 per barrel as the breakeven price of Permian oil.
Meanwhile, Citi said in a research note this week that if Donald Trump becomes president again, this would have a net bearish impact on oil prices as a result of oil-friendly policies and trying to push OPEC+ to increase supply to the market.
“Trump could roll back environmental policies, though broadly overturning the (Inflation Reduction Act) looks unlikely due to its positive impacts in red states,” analysts at Citi wrote in the note carried by Reuters.
