Oil Price Predicted to Hit $90, a barrel

Due to the faster-than-expected recovery in demand for gasoline, following the effects of the spread of the Coronavirus’ mutant Delta and the impact of Hurricane Ida on global supply, Goldman Sachs boosted its projection for Brent crude, to $90 a barrel from $80, by the end of the year.

Brent futures hit three-year highs last week, according to “Reuters,” as corporations drew big amounts of crude from their inventories, due to supplies interruptions around the world.

At 0619 GMT, the price of the benchmark crude, Brent, was $79.19 per barrel, while the price of the US West Texas Intermediate crude was $75.08.

In a note dated September 26, Goldman Sachs said:”We have long had a positive outlook for oil prices, but the supply-demand deficit is currently larger than our expectations, with global demand rebounding from the effect of a Delta mutant, shifting faster than our previous forecast and global supply continuing, at levels lower than our expectations.”

The Organization of Petroleum Exporting Countries (OPEC) and its partners, or in short the (OPEC+) agreed earlier this month to keep committing to a July pact, to gradually reduce output curbs.

On the other hand, the Hurricane Ida’s supply damage has surpassed the OPEC+ output boom, and non-shale oil production remains unsatisfactory.

Taking into account the potential of a US-Iran nuclear deal by April, Goldman Sachs decreased its average projection for the second and fourth quarters of 2022 from $85 down to $80  a barrel.