U.S. investment bank Goldman Sachs announced that it expects Brent crude prices to reach $80 per barrel this summer, on the assumption that the recent oil market rally will continue as vaccination rollouts boost global economic activity and demand for the commodity.
The investment bank said in a note released yesterday that the “Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 mb/d (million barrels per day) in the last month to 96.5 mb/d.”
Goldman Sachs has longstanding commodity sector expertise and they project a recovery in oil demand to continue, with global demand reaching 99 mb/d in August.
Iran and global powers have been negotiating since April to lift sanctions on Tehran, which has hit its economy hard by cutting its vital oil exports.
The investment bank said the delay in the negotiations for an Iran nuclear deal will mean the Iranian oil supply will not be returning to the market anytime soon, which will, in turn, push the price of the commodity northward.
To put investors minds at ease, U.S. Secretary of State Antony Blinken said on Tuesday that even if Iran and the United States reach a nuclear deal, hundreds of U.S. sanctions on Tehran would remain in place. This means that the return of the Iranian oil is not happening anytime soon.
The Investment bank said this on the issue, “Recent headlines comfort us in our expectation that a potential recovery in Iran exports won’t happen till the fall. While there exists both OPEC+ upstream and refinery downstream excess capacity, we expect OPEC+ to fall behind the demand rebound.”