Goldman Sachs Reiterates $80 Per Barrel Oil Forecast As Summer Demand Rebounds

Goldman Sachs has doubled down on its previous forecast, calling for Brent crude to hit $80 per barrel this summer as global demand rebounds.

According to a Goldman Sachs note later quoted by Reuters, the strong uptake in vaccination rates across the US and Europe are increasing mobility and travel optimism, causing global demand to rise by 1.5 million barrels per day to 96.5 million barrels per day over the past month. Goldman previously revealed the $80 per barrel forecast back in March, suggesting that it could happen as early as the third quarter of 2021.

Come April, the bank maintained its forecast, noting that “The magnitude of the coming change in the volume of demand — a change which supply cannot match — must not be understated.” One month later, the analysts reiterated that forecast, adding that the circumstance for higher crude prices remain intact in wake of a strong vaccine uptake and an increase in oil demand amid inelastic supply, referring to US and Iran coming to an agreement regarding the latter country’s nuclear program and the subsequent lifting of sanctions.

Although the market would perceive the lifting of sanctions on Iran as bearish for crude prices, analysts’ opinions differ on the extent of such a price decline. As Goldman notes, the restoration of Iranian oil in the global crude supply will likely not have a profound impact on prices. Indeed, just last week, Washington lifted some sanctions against Tehran officials, causing prices to momentarily slide; however they soon rebounded back to above $71 per barrel.

Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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