Europe isn’t out of the woods yet with the energy crisis, and oil will spike to $115 by early next year, Goldman Sachs’ global commodities chief says

• Europe should brace for another spike in oil prices, Goldman Sachs’ global commodities chief Jeff Currie.
• He told CNBC that the EU oil ban, China’s emergence from lockdown, and other factors will cause Brent crude to hit $115 a barrel.

Europe isn’t out of the woods yet with its energy crisis, as oil prices are set to spike by early next year, according to Goldman Sachs’ global commodities chief Jeff Currie.

In an interview with CNBC on Monday, he said oil supply shortages could pose problems, as the European Union ban on Russian oil edges closer and Western countries near a price cap, which could send prices higher if Russia retaliates.

That will be exacerbated by other factors, he added, such as China’s emergence from its lockdown policy, slowing US shale production, and an end to oil releases from the US Strategic Petroleum Reserve, which the Biden administration has used to curb high oil prices since May.

“You put it all together, it starts to get bullish at the end of this year and early next year,” Currie said. The commodities bull warned oil prices could be an issue as soon as December, and backed a previous Goldman estimate that Brent crude would reach $115 a barrel.

Meanwhile, Europe has been building up natural gas inventories and ramping up purchases of LNG ahead of winter.

That will help curb supply shortages stemming from slashed Russian gas supplies — but long-term issues in regarding the energy crisis still persist, Currie warned.

“You never get hit by a train you see coming. [Europe] made the preparations, they dealt with it. But they haven’t dealt with the problem of next summer and the following winter, so there’s still a structural problem out there that they need to deal with,” he said.

“We’re not out of the woods yet on a medium or longer-term basis,” he later added.