The bullish case for oil
WTI crude oil is up 91-cents today to $66.61. It's the second day of gains after yesterday's 5.8% jump, which was the largest in six months.
The rebound has come on China containing covid and US cases nearing a crest.
Goldman Sachs continues to call for $80 brent by year end and believes there's a great setup for buying commodities more broadly.
They note that delta and China are currently overshadowing a tightening market.
"We believe the micro -- steadily tightening commodity fundamentals -- will trump these macro trends as we move twoards autumn, pushing many markets like oil and base metals to new highs for this cycle," write analysts led by Jeff Currie.
They note that the pace of growth has likely peaked, something that could dampen other risk trades, but for commodities it's overall demand that matters.
Tracking mobility, they believe that the hit to Chinese demand is only 0.7 million barrels per day and that overall global demand remains near 98 mbpd with demand strong outside of Asia. Globally, they see a 1.5 mbpd deficit in the past month and "precariously low" storage levels in emerging markets excluding China.
