Feb 22 Reuters Goldman Sachs Commodities Research raised by 10 its Brent crude oil price forecasts for the second and third quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows.
The Wall Street bank expects Brent prices to reach 70 per barrel in the second quarter from the 60 it predicted previously and to 75 in the third quarter from 65 earlier.
We believe this faster rebalancing during what was expected to be the dark days of winter will be followed by a widening deficit this spring as demand rebounds faster than supply, setting the stage for a tight physical market, Goldman said in a note dated Sunday.
The bank now expects global oil demand to reach 100 million barrels per day bpd by late July 2021 versus its previous expectation of August 2021.
Oil prices rose on Monday as the slow return of U.S. crude output that was cut by frigid conditions raised concerns about supply just as demand rebounds.
Goldman expects the freeze in Texas to lead to a 1.5 million bpd global deficit this month and cut output by 0.2 million bpd in March due to infrastructure damage and missed completions.
An agreement to hike production by the Organization of the Petroleum Exporting Countries and its allies in the upcoming March meeting will not be bearish for prices as supply is set to lag, Goldman said.
It expects a 0.5 million bpd increase in quotas in April, with Saudi Arabia reversing its unilateral 1…