Emmanuel Addeh in Abuja with agency report
Goldman Sachs, a leading global financial institution, has reiterated its forecast that Brent crude will hit $80 per barrel this summer as demand quickly recovers.
Goldman had in March this year, estimated that Brent crude would rise $80 per barrel this year.
“Rising vaccination rates are leading to higher mobility in the United States 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 investment bank said in a note seen by Reuters.
In April, the bank had reiterated 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.”
A month later, Goldman analysts wrote that “The case for higher oil prices therefore remains intact given the large vaccine-driven increase in demand in the face of inelastic supply,” referring to the possibility that the United States and Iran will reach an agreement on the latter’s nuclear program that would lead to the lifting of US sanctions.
The lifting of the US sanctions on Iran is unanimously seen as bearish for oil prices, but observers differ in their opinion on exactly how bearish it would be.
According to Goldman, the return of Iranian oil to global markets will not have a significant effect on demand dynamics and, therefore, prices.
Indeed, earlier, the US had lifted some sanctions against Tehran officials, and prices fell, but not for long as Brent was still trading above $72 per barrel and West Texas Intermediate was changing hands at $70.72 per barrel.
Meanwhile, OPEC has said it expected oil demand to rise by six million bpd this year, and the International Energy Agency (IEA) forecast it would add 5.4 million bpd this year and another 3.1 million bpd next year, returning to and exceeding pre-pandemic levels to reach 100.6 million bpd by the end of 2022.
