Goldman's Gary Cohn: Beware $30 oil

GS COO: When US runs out of crude storage
GS COO: When US runs out of crude storage

Goldman Sachs President Gary Cohn told CNBC on Wednesday he is very concerned about the short-term window for oil and said crude prices could fall to $30 a barrel as the industry runs out of storage space.

With the winter heating oil season ending, refineries are turning to producing more gasoline for the summer driving season, he said. That means they will not need crude oil for weeks or months, depending on turnaround and maintenance time, he added.

"That crude oil backs up in the system," he said. "I'm concerned we're going to run out of crude oil storage, land-based storage in the United States, especially in the mid-continent and Texas."

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On Wednesday, the Energy Information Administration reported that inventories of U.S. commercial crude rose by 4.5 million barrels, pushing stockpiles to the highest level on record. The Associated Press previously reported that about 1 million barrels of crude per day above what it can consume.

If the industry runs out of storage, front-month contracts for oil could plummet, Cohn warned. "Forward prices could stay relatively stable, but the headline may read, 'We've got $30 oil in the United States," he added.

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That will likely boost consumer sentiment and would have a fairly big impact on Federal Reserve's timeline for raising interest rates, he said.

"It's hard to raise interest rates potentially when you see deflationary oil prices," Cohn said.