Goldman Sachs – Virus-stricken Winter Unlikely To Derail Oil Market Rebalancing
A surge in COVID-19 instances within the winter season won’t derail the oil market rebalancing pushed primarily by vaccine progress, Goldman Sachs stated in a word, including that it sees an extra upside in Brent to $65 per barrel by means of 2021.
The bank, nonetheless, stated it expects the winter wave to hit world oil demand by at the very least three million barrels per day, partially offset by heating, restocking and demand in rising markets.
“We expect these muddied short-term fundamental signals and the opposite pulls of lockdowns vs. vaccines to keep oil prices volatile in coming weeks,” Goldman Sachs stated.
Each Brent and U.S. West Texas Intermediate (WTI) crude futures are set for a greater than 20% rise in November, lifted by hopes that promising information surrounding vaccine efficacy charges will help gas demand.
Markets now eye a gathering of Group of the Petroleum Exporting Nations (OPEC) and allies together with Russia – the OPEC+ grouping – the place they’re largely anticipated to delay subsequent yr’s deliberate improve in oil output amid a second COVID-19
wave.
“While we base-case a 3-month delay to prevent a return to a global oil surplus through 1Q21, not all producers appear onboard, with a lack of extension representing $5/bbl downside from current spot levels on our modeling, further contributing to short-term price gyrations,” Goldman stated.
Disclaimer: This publish has been auto-published from an company feed with none modifications to the textual content and has not been reviewed by an editor
