Goldman Sachs: Global Oil Stocks to Hit Record Low

Goldman Sachs (GS) stock is trading at $926.94, below its 20-day moving average of $931.45, despite a positive sector outlook from the firm. The RSI stands at 47.9, indicating neutral territory, while the MACD is below the signal line, suggesting weak short-term momentum. Although a decline in oil inventories is positive for GS's commodities and energy division, its impact on the stock price may be limited. Therefore, the short-term direction is unclear, and a neutral stance is recommended.

The headline features Goldman Sachs' forecast that global oil inventories will hit record lows. Such news could push oil prices upward due to expectations of supply constraints. However, technical indicators paint a weak picture: the price closed at $99.13, down 6.9%, with the RSI near the oversold zone at 41, the MACD below the signal line, and the price below both the 20-day and 50-day moving averages. In the short term, the positive impact of the news may be limited by technical resistance, so an upward move is possible but a strong rally should not be expected.

The news points to supply tightness, creating a positive foundation for oil prices. However, technical indicators suggest short-term weakness: the price is below the 20- and 50-day moving averages, the RSI is neutral at 45, and the MACD is below its signal line. The 2.68% decline in the last 24 hours indicates continued selling pressure. Therefore, the impact of the news may not be immediate but could gradually materialize over a few days. I expect an upward move in the short term, but with moderate confidence.

The news signals a supply squeeze as oil inventories are expected to reach record lows, which could push oil prices higher. Although XOM stock has seen a slight uptick in the last 24 hours, the RSI remains neutral at 50.7, and the MACD continues to stay below the signal line. The stock is trading just below its 20-day moving average, indicating potential resistance in the short term. However, the positive news flow and weak recovery signs in technical indicators increase the potential for an upward move in the coming days. Nonetheless, given the MACD's negative territory and the price remaining below the SMA20, any rally may be limited.