Goldman sees crude at $80/b, even with Iranian barrels

24 May 2021

London, (Quantum Commodity Intelligence) – US bank Goldman Sachs said Monday the case for higher oil prices remains intact despite the likelihood of fresh Iranian supply hitting the market later this year, maintaining its forecast at $80/b.

The forecast, published in a research note Sunday, implied a 20% rise in crude oil prices, which were trading around $67.66/b by time of press.

“Even aggressively assuming a restart in July, we estimate that Brent prices would still reach $80/b in 4Q21, with our new base case for an October restart still supporting our $80/b forecast for this summer,” the research note said.

The US bank said that with the growing evidence of a demand rebound last week’s sell-off in oil futures meant there were opportunities to position for a fresh rally higher.

The market expects supply to rise between 500,000 barrels and 1.5 million barrels over the next few months as the US returns to the negotiating table to breathe new life into the Iran nuclear deal.

But a return to economic activity in Europe and the US will outweigh any fresh supply and the  effects of an ongoing outbreak in southeast Asia, according to the bank.

The forecast contrasts sharply with that of UK bank Barclays, which last week suggested Brent would average $66/b later this year.