(Reuters:) Goldman Sachs’ (NYSE:) Brent oil price predictions were increased by $10-$135 per barrel between the second and third quarters of 2022, based on the belief that there was still a structural supply problem.

Analysts at the bank stated in June 6 that prices would have to increase to meet the forecast levels for supply to stabilize by the end of 2023.

According to Goldman, a “politically generated surplus” was caused by a modest drop in Russian oil exports and large releases from Strategic Petroleum Reserves. The COVID-led lockdowns in China were ending because of Chinese recovery and the EU ban.

The European Union’s leaders have agreed to an embargo against Russian crude oil imports. It will be in full effect at the year’s end 2022 and aim to stop 90% of Russia’s crude exports into the bloc of 27 nations.

Russian production declined to 9.8 millions barrels per hour (bpd) in the last year, down from 10.8 million BPD in May. However, it recovered slightly to 10,000,000 bpd by 2023.

According to Wall Street Bank, April was a tighter market than anticipated because of the inelastic supply response to price spikes.

The demand side is still weak enough to balance inventories at current levels. Accordingly, oil prices must continue to rise to reduce the unsustainable low global inventories and OPEC spare capacity.

On Tuesday, oil prices were steady at $119.07 per barrel. This was due to a balance between supply and risk concerns, along with the possibility of increased demand from China as it relaxes COVID restrictions. [O/R]