The debate is on over whether the U.S. is in a recession , but Goldman Sachs’ top energy analyst says one key indicator is not flashing warning signs: commodity markets. Jeff Currie, the firm’s global head of commodities research, said that demand for commodities remains strong, suggesting the U.S. is not in a recession. “If you look at global demand for commodities — oil and metals together — the recession was back in April and May when China went through the severe lockdowns,” he said Monday on CNBC’s “Squawk Box.” “The overall demand picture — it’s still growing.” Currie noted that while a slowdown is occurring, demand is not contracting. This “key point,” as he called it, is getting lost in the broader narrative, which has become one of demand loss and tumbling oil prices. “The reality is that the underlying picture is slower demand growth after a very torrid pace earlier this year and not an outright contraction,” he said. Ultimately, the physical and financial markets are telling different stories. But the fundamentals point to a still-tight market. Currie noted that even if the economy does tip into a recession, it’s likely to be broad-based and shallow. This is much different from the conditions in 2020, when global lockdowns sapped demand for oil and petroleum products. Oil prices have fallen from their recent highs in March, when Russia’s invasion of Ukraine sent crude surging to the highest level since 2008 . West Texas Intermediate crude , the U.S. oil benchmark, shed 4.8% on Monday to trade at $93.88 per barrel. International benchmark Brent crude stood at $100.26 per barrel, for a loss of 3.6%. Both benchmarks traded above $130 in March . Currie expects oil to regain that level. Demand is still growing as economies worldwide continue to emerge from the pandemic. “The upside over the next three to six months is substantial,” he said, reiterating his $130 end-of-year target for Brent. “Physically the market is in a deficit still. The pullback in prices will stimulate more demand,” he said. Currie said demand could increase by an additional 1 million barrels per day. And that doesn’t take into consideration the release of oil from the Strategic Petroleum Reserve, which is set to stop come October. “We would argue in energy the upside potential to reach new highs in the second half of this year is still very, very high,” Currie said.
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