Goldman Sachs Oil Comment: Prices at the Pump: Persistently Pricey
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Key Views
Three structural factors are expected to keep fuel retail prices high relative to crude. First, refining fundamentals remain tight: global refinery utilization is near historic highs and product inventories are low. Second, geopolitical supply shocks persist, with refinery outages in the Middle East and Russia running nearly 5 million b/d above seasonal norms. Third, asymmetric pass-through dynamics—supported by low retail inventories and survey evidence—indicate that energy price increases push consumer prices up more than equivalent decreases pull them down.
Outlook
Goldman Sachs forecasts US 3-2-1 product margins at $27/bbl for 2027, well above the 2013–2019 average of $13/bbl. Fuel retail prices are likely to remain elevated relative to crude oil, driven by tight refining fundamentals, geopolitical risk, and asymmetric price transmission.
Key exhibits
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