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Goldman expects Brent oil prices to reach $65 per barrel in summer 2021

The Democrat-led sweep of the US Senate runoff elections and Saudi Arabia's recent announcement of unilateral production cuts have left commodity markets with a "tighter" medium-term outlook, analysts at the bank said in a note.

January 11, 2021 / 09:23 PM IST
Reuters

Reuters

Brent oil prices could rise to $65 per barrel by summer 2021, Goldman Sachs said on Monday, driven by output cuts in Saudi Arabia and the implications of a shift in power to the Democrats in the United States.

The Wall Street investment bank had previously predicted oil would hit $65 by year-end.

The Democrat-led sweep of the US Senate runoff elections and Saudi Arabia's recent announcement of unilateral production cuts have left commodity markets with a "tighter" medium-term outlook, analysts at the bank said in a note.

Last week, the bank said Saudi Arabia's pledge to cut its output by more than required under its pact with other OPEC+ producers points to weakening oil demand following new COVID-19 lockdowns.

Brent crude fell as much as $1 per barrel on Monday, to trade around $55. Oil prices shed about 20 percent in 2020.

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The bank forecast returns of 5.8 percent, 9.5 percent and 10.2 percent on commodities over a three-, six- and 12-month period respectively on the S&P/GSCI Goldman Sachs Commodity Index (GSCI).

Precious metals were seen returning 28.7 percent over a 12-month period, followed by energy at 13.7 percent and industrial metals at 13.3 percent, while agriculture would lose 4.4 percent, the bank said.

"Given the magnitude of the recent rally, however, markets are likely to consolidate near-term," the bank said.

The bank had in November forecast returns of about 3.4 percent, 9.4 percent and 26.8 percent respectively over a three-, six- and 12- month period.

 
Reuters
first published: Jan 11, 2021 09:20 pm

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