Goldman Sachs upped its forecast for year-end Brent crude to $90 a barrel from $80, after prices reached new highs since October 2018.
“While we have long held a bullish oil view, the current global oil supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above consensus forecast and with global supply remaining short of our below consensus forecasts,” the bank said.
In particular, Goldman noted that hurricane Ida has more than offset the ramp-up in OPEC+ production since July, with non-OPEC+ non-shale production continuing to disappoint.
“On the demand side, low hospitalisation rates confirm that vaccines are effective and are leading more countries to re-open, including to international travel in particularly Covid-averse countries in Asia.
“Winter demand risks are further now squarely skewed to the upside as to the global gas shortage will increase oil fired power generation (for which we are positioned for with our long 1Q22 Singapore fuel oil trade recommendation).”
