The black liquid is bullish for the 5th consecutive day with the global benchmark, the Brent oil futures, approaching the $80 mark amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions. Also boosting investors’ confidence is Goldman Sachs’ global head of commodities research, Jeff Currie, stating that the global benchmark could hit $90 per barrel if the approaching winter in the northern hemisphere proves colder than normal. The forecast is $10 higher than the bank’s current forecast.
The global benchmark, the Brent crude is up 1.22%, currently trading at $78.17 a barrel. This comes after gaining for the third consecutive week through Friday. U.S. benchmark, the West Texas Intermediate (WTI) is bullish at 1.22% to $74.88 a barrel, near its highest since July, after rising for 5 straight weeks.
Read: World’s biggest independent oil trader says prices will rise above $80 due to gas crisis
In an interview with Bloomberg, Jeff Currie explained that the tightening of gas supplies in Europe will elevate the demand for oil as an alternative at a time when global crude output is constrained. He used the post-hurricane disruptions in the U.S. Gulf of Mexico as an example to take home his point.
This forecast comes after the banking giant had predicted $80 per barrel for oil in the summer citing higher demand for travel and acceleration of vaccinations in Europe are set to result in “the biggest jump in oil demand ever, a 5.2 million barrels per day (bpd) rise over the next six months.”
Asides from Goldman’s forecast, ANZ analysts said in the note that rising gas prices is also causing oil prices to go higher as the liquid becomes relatively cheaper for power generation. They stated, “Supply tightness continues to draw on inventories across all regions.”
Read: Nigeria’s crude oil production falls by 90,000 BPD in August despite OPEC increase – report
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), are finding it difficult to raise output as under-investment or maintenance delays persist from the pandemic.
India’s oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.