Goldman Sachs is now even more bullish on oil and expects Brent Crude prices to hit $ 75 a barrel in the third quarter of this year, thanks to a faster market rebalance, lower forecast stocks and traders hedging against inflation.
In a note quoted by Forexlive on Sunday, investment bank analysts predict Brent Crude prices will hit $ 70 a barrel in the second quarter of this year and $ 75 in the third quarter. Goldman Sachs raises its previous Q2 and Q3 forecasts at $ 10 a barrel.
“A faster rebalancing during what is expected to be the dark days of winter will be followed by a rising deficit this spring as OPEC + production gains fall short of our expectations for demand to recover above consensus” , Goldman Sachs said.
“We further believe this additional rally will be supported by the current repositioning for a reflationary environment where investors are turning to oil, buying a lagging real asset that is benefiting from a stimulus-driven recovery and has shown unparalleled ability to hedge. against inflation shocks, ”noted the analysts.
Goldman expects lower inventories to lead to an oil price recovery sooner and at higher price levels.
Monday morning, Brent Crude prices jumped 2 percent to $ 64.18 at 9:44 a.m.ET, while WTI Crude again rose above $ 60 a barrel after a 2.6 percent increase to $ 60.78.
Earlier this month, Goldman Sachs had another bullish message for the oil markets, saying in a note that it expected global demand for oil to recover to a pre-pandemic level of 100 million bpd by August this year.
According to Goldman, the oil market had a deficit of 2.3 million barrels per day in the last quarter of 2020. With supply still tight in early 2021, the immediate future for prices looks bright despite expectations for a slow recovery in demand.
By Tsvetana Paraskova for Oilprice.com
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