Daan Struyven, head of oil research at Goldman Sachs, says that if no new geopolitical tensions emerge, the price of Brent crude oil should fall. In his view, the higher-than-expected oil stocks data are unreliable enough on their own to justify lower prices. Other factors, such as the reduction in the geopolitical risk premium, currently between $5 and $10 per barrel, and the fall in demand from Asian refiners, are amplified by algorithmic selling.

Struyven suggests that, without geopolitical disruptions affecting supply, $90 could be the ceiling for Brent prices this year. However, he acknowledges that US sanctions on Venezuela and Iran could affect supply and prices. He notes that production in these two countries is increasing despite the sanctions, and that Chinese demand for oil remains a key factor in the growth of world demand.

He also mentions the possibility of OPEC+ extending its production cuts, as well as potential geopolitical shocks that could affect supply. The options market illustrates a demand for hedging against oil price rises.

Finally, Struyven suggests that the summer season could boost demand. He advises caution when prices reach the upper end of the range and recommends buying when prices are at the lower end, stressing the importance of gold and oil as hedges against geopolitical risks.

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