Nigeria, other OPEC, and even OPEC + members could earn more from the black gold, according to a new analysis from Goldman Sachs.
The US bank is predicting that crude oil price could increase by $10 per barrel for the second and third quarters of 2021.They base their prediction on the fall in supply and rising costs.
Goldman Sachs said on Monday that Brent is likely to average $65/barrel in the second quarter and $75/barrel in the third quarter. Its previous forecasts were $10/barrel lower in each case.
According to the bank, the main catalysts for rising prices include low inventories, higher costs and speculative inflows.
“We now believe that oil prices will rally sooner and higher than our previous $65/barrel summer forecast because of fundamentals, higher marginal costs — as least in the short run — as well as the ongoing reflationary asset rotation,” it said in a note, quoted by Argus Monday. Reflation is the act of stimulating the economy by increasing the money supply or by reducing taxes, seeking to bring the economy back up to the long-term trend, following a dip in the business cycle.
Goldman Sachs expects Brent to average $70/barrel in both the fourth quarter and in 2022, up by $5/barrel.
Goldman Sachs has also said, beyond expectations, demand and supplies have rebalanced faster than was expected during the winter and the deficit is likely to broaden the northern hemisphere spring because the rise in OPEC+ production delays the recovery in demand.
Any rise in Iranian exports will most likely take months to materialise and this is accommodated within an aggressive increase in the amount of OPEC+ output.