Goldman Sachs on oil - says China reopening is a "game changer". Also like gold.

A note from Goldman Sachs on commodities Commodities Commodities are assets that are either naturally grown or occurring in the environment. Most commonly this includes precious metals such as gold, silver, and palladium.Beyond metals, commodities can also focus on agricultural or industrial goods that are central to manufacturing or other sectors. This includes crude oil, copper, wheat, and others.Relative to other assets, commodities are an extremely complex form of investment, with many similarities and differences to existing products.Commodit Commodities are assets that are either naturally grown or occurring in the environment. Most commonly this includes precious metals such as gold, silver, and palladium.Beyond metals, commodities can also focus on agricultural or industrial goods that are central to manufacturing or other sectors. This includes crude oil, copper, wheat, and others.Relative to other assets, commodities are an extremely complex form of investment, with many similarities and differences to existing products.Commodit Read this Term has a very bullish outlook.

Analysts at the bank say commodities will show “superior total returns” through this year, citing economic "macro and micro dynamics re-aligning again", low inventories.

On Oil:

• Over a 12-month period, the bank forecast returns of 46.9% from energy, 29.6% from industrial metals and 5.7% from precious metals
• “Oil markets are not pricing the expected uplift in demand combined with the downturn in Russian production”
• “China’s reopening is a game-changer”
• “Commodities like crude oil, refined petroleum products, LNG, and soybeans are particularly set to benefit from China’s demand tailwind”
• over the next 12 months GS sees energy returns of around 47%
• expectations of smaller rate hikes from the U.S. Fed will contribute to strong commodity demand

Goldman Sachs forecasts WTI WTI WTI is the short-hand for West Texas Intermediate crude oil. WTI is a type of petroleum crude oil that serves as a benchmark in oil pricing. It is a light, sweet crude oil that is extracted from West Texas area in the United States, including the Permian Basin. WTI crude oil is considered to be a high-quality oil due to its low sulfur content and high yields of gasoline and diesel fuel when refined. It is used as a benchmark for pricing other types of crude oil, and the price of WTI crude o WTI is the short-hand for West Texas Intermediate crude oil. WTI is a type of petroleum crude oil that serves as a benchmark in oil pricing. It is a light, sweet crude oil that is extracted from West Texas area in the United States, including the Permian Basin. WTI crude oil is considered to be a high-quality oil due to its low sulfur content and high yields of gasoline and diesel fuel when refined. It is used as a benchmark for pricing other types of crude oil, and the price of WTI crude o Read this Term averaging $92 / bbl in 2023. Also like gold:

• “While central bank tightening and the USD have been macro headwinds for commodities in second half of 2022, we believe a sustained inflection in the USD provides an ingredient for a fairly significant upside in commodities”
• Gold, in particular, is likely to be on a cusp of sustained upside as de-dollarisation is very bullish gold
• at a time that the Fed is likely to increasingly shift towards growth concerns slowing its rate hike path allowing ETF holdings to stabilise