According to Goldman Sachs analysts, although crude oil prices have increased by 30% in the past three months, they are not expected to result in a decline in U.S. consumer spending or GDP growth. The analysts state that the magnitude of the oil price increase is relatively small compared to previous periods, and any negative impact on GDP growth will be partially offset by lower electricity prices. Additionally, the analysts believe that the Federal Reserve is unlikely to tighten its policy in response to the higher prices. Goldman Sachs forecasts that most of the rebound in oil prices has already occurred.
However, Continental Resources CEO Doug Lawler disagrees with Goldman Sachs’ assessment. Lawler predicts that crude prices will remain elevated and could even reach the $120-$150 per barrel range without new production. He warns that this could potentially cause a shock to the system. Chevron CEO Mike Wirth also echoes Lawler’s concerns, stating that without policies in place to encourage more production, prices will continue to increase. Despite these warnings, U.S. shale oil production has been decreasing, with government analysts forecasting a third consecutive monthly decline in October.
In summary, while Goldman Sachs analysts believe that the recent increase in oil prices will not have a significant negative impact on U.S. consumer spending or GDP growth, CEOs from leading oil companies express concerns that prices could continue to rise if production does not increase. The contrasting viewpoints highlight the uncertainty surrounding the future trajectory of oil prices and its potential effects on the economy.