Goldman Cranks Up Its Oil Price Target
"The disruptions in Libyan oil supplies have lasted far longer than we initially thought with no near-term resolution in sight, which was further complicated by the involvement of the military late last week," said Goldman Sachs' Jeff Currie in a new note to clients. "Combined with the ongoing problems in Iraq which we see extending into the autumn, OPEC outages since the beginning of the summer have taken 33 million barrels off the market, which was further exacerbated by a 32 million barrel downward revision to total OECD petroleum inventories by the IEA."
"In our view, these developments will likely lend support to Brent prices around the $115.00/bbl level in the very near term," he said.
Brent oil is current trading near $110 per barrel.
Fortunately, there are plenty of supply sources that should prevent oil prices from getting too out of control.
"[P]rices too far above that are unlikely as the [Strategic Petroleum Reserve] acts as significant spare capacity," Currie added. "Not only has the shale revolution in the US freed up these supplies, but given the importance of the current economic recovery, governments will be quick to temper any price spike with strategic reserves."
In the note, Currie raised his 3- and 6-month Brent price forecasts to $110 and $108, respectively, from $105. His 12-month target continues to be $105.
Here's a historical chart of Brent oil via Investing.com.
- I got a $40K raise using this 30-second strategy. It made me realize loud work, not hard work, always wins.
- Qatar Airways' new CEO explains why it's sticking with the Airbus A380 as other airlines retire the costly superjumbo
- Prince Harry and Meghan found out about Kate Middleton's cancer diagnosis on TV like everyone else, report says
- PM Modi and Bill Gates discuss AI, climate change, millets and more
- Consuming excessive salt and inadequate potassium, protein is making North Indians prone to life-threatening diseases: Study
- Upcoming cars and two-wheelers launching in India in April 2024
- Ice melt in Antarctica and Greenland is slowing Earth's rotation, affecting timekeeping: Study
- Elections on a plate: Poll panels fix menu & expense ceiling for Samosa, tea, biryani & more