Goldman Sachs Expects $80 Crude Oil This Summer
June 14, 2021
Crude oil prices closed higher on Friday reaching 2-year highs which was mainly driven by a bullish International Energy Agency monthly report stating that demand will return to pre-pandemic levels by the end of 2022. IEA said that in 2022, OPEC+ needs to ramp up crude oil output by 1.4 million bpd above its July 2021 – March 2022 target to meet demand.
Prices also rose on optimism for strong economic demand after the US unemployment claims fell to their lowest since the start of the pandemic in March of 2020.
Baker Hughes reported on Friday that US crude oil rigs were up by 6 and 193 rigs have been added since 8/21/2020.
OPEC kept their world oil demand forecast unchanged from last month with oil demand expected to rise by 6.6% or 5.95 million bpd this year.
Goldman Sachs forecast that the oil rally will continue with Brent crude oil expected to reach $80 dollars per barrel this summer. It said that while there exists both OPEC upstream and refinery downstream excess capacity, we expect OPEC+ to fall behind the demand rebound. It forecast the oil demand recovery will continue, with global demand expected to reach 99 million bpd in August.
Three sources stated the President Joe Biden’s administration is considering ways to provide relief to US oil refiners from biofuel blending mandates. It could prompt and about-face for the administration, which had been rolling back former President Donald Trump’s expansion of waivers for US refiners from the Renewable Fuel Standard.