Goldman Sachs raised its forecast for year-end Brent crude oil prices to USD 90 per barrel from USD 80, as a faster fuel demand recovery from Delta variant and Hurricane Ida’s hit to production led to tight global supplies.
Brent futures hit a near three-year high last week as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.
Hurricane Ida’s hit to supply has more than offset OPEC+’s production ramp-up since July with non-OPEC+ and non-shale production continuing to disappoint, Goldman said.
Hurricane Ida and Nicholas, which swept through the US Gulf of Mexico earlier this month, damaged platforms, pipelines and processing hubs, shutting most offshore production for weeks.
On the demand side, Goldman said risks were “squarely” skewed to the upside in the winter, as a global gas shortage will increase oil-fired power generation.
Goldman, however, flagged a potential new virus variant, which could weigh on demand and an aggressively faster ramp-up in OPEC+ production that may soften its projected deficit, as key risks to its bullish outlook.
For 2022, the bank lowered its average forecasts for the second and fourth quarter to USD 80 per barrel from USD 85 per barrel as it factored in the possibility of an Iran-US nuclear deal by next April.