Oil rally has more room to run, Brent expected to hit $80/bbl – Goldman

Commodities31 minutes ago (Jun 11, 2021 02:36AM ET)

(C) Reuters. FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant/File Photo

(Reuters) – U.S. investment bank Goldman Sachs (NYSE:GS) expects Brent crude prices to reach $80 per barrel this summer, betting that a recent oil market rally will continue as vaccination rollouts boost global economic activity and demand for the commodity.

Brent prices hit $72.93 per barrel this week, their highest level in over two years, fuelled by expectations of stronger demand.

Brent futures were trading at $72.21 a barrel on Friday, while U.S. West Texas Intermediate (WTI) crude was around $70 a barrel. [O/R]

“Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 mb/d (million barrels per day) in the last month to 96.5 mb/d,” the bank said in a note released late on Thursday.

Goldman, which has longstanding commodity sector expertise, expects recovery in oil demand to continue and sees global demand reaching 99 mb/d in August.

The investment bank also said slow progress in negotiations on an Iran nuclear deal could also weigh on oil supply, supporting prices.

Iran and global powers have been negotiating since April to lift sanctions on Tehran, which have hit its economy hard by cutting its vital oil exports.

U.S. Secretary of State Antony Blinken said on Tuesday he anticipates that even if Iran and the United States return to compliance with the nuclear deal, hundreds of U.S. sanctions on Tehran would remain in place.

“Recent headlines comfort us in our expectation that a potential recovery in Iran exports won’t happen till the fall,” the bank said.

“While there exists both OPEC+ upstream and refinery downstream excess capacity, we expect OPEC+ to fall behind the demand rebound.”

Oil rally has more room to run, Brent expected to hit $80/bbl – Goldman

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Stories

Discover

‘Whatever it takes’, UK’s Johnson warns EU over post-Brexit...

World7 minutes ago (Jun 12, 2021 09:57AM ET) 2/2 (C) Reuters. Britain's Prime Minister Boris Johnson...

Toshiba board to hold emergency meeting on Sunday, sources...

Stock Markets40 minutes ago (Jun 12, 2021 09:25AM ET) (C) Reuters. FILE PHOTO: The logo...

Chile shuts capital Santiago once more as vaccines fail...

World49 minutes ago (Jun 12, 2021 09:15AM ET) (C) Reuters. FILE PHOTO: A woman walks...

UBS investment makes Byju’s the most valuable startup in...

Edtech giant Byju’s has become the most valuable startup in India after raising about...

U.S. screens 2.02 million airport passengers Friday – highest...

Stock Markets11 minutes ago (Jun 12, 2021 08:55AM ET) (C) Reuters. FILE PHOTO: Travelers go...

Exclusive-Macron offers UK’s Johnson ‘Le reset’ if he keeps...

Forex10 minutes ago (Jun 12, 2021 04:55AM ET) (C) Reuters. Britain's Prime Minister Boris Johnson...

Popular Categories