Goldman Sachs raised its forecast for year-end Brent crude oil prices to $90 per barrel from $80, as a faster fuel demand recovery from Delta variant and Hurricane Ida’s hit to production led to tight global supplies.
Brent futures hit a near three-year high last week as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.
Oil prices were trading at $78.50 a barrel at midnight Indian time, while US West Texas Intermediate (WTI) crude were at $75.30 a barrel.
“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” Goldman said in a note dated September 26.
Earlier this month, the Organisation of the Petroleum Exporting Countries and allies, a group known as Opec+, agreed to stick to its decision made in July to phase out record output cuts.
Hurricane Ida’s hit to supply has more than offset Opec+’s production ramp-up since July with non-Opec+ and non-shale production continuing to disappoint, Goldman said.
Hurricane Ida and Nicholas, which swept through the US Gulf of Mexico earlier this month, damaged platforms, pipelines and processing hubs, shutting most offshore production for weeks. On the demand side, Goldman said risks were “squarely” skewed to the upside in the winter, as a global gas shortage will increase oil-fired power generation.
Goldman, however, flagged a potential new virus variant, which could weigh on demand and an aggressively faster ramp-up in Opec+ production that may soften its projected deficit, as key risks to its bullish outlook.
Diesel price
The price of diesel on Monday was hiked by 25 paise per litre -— the third increase since last week -— and more rate hikes for both diesel and petrol are in the offing in the coming days as international oil prices have soared to a three-year high, according to PTI.
The price of diesel was hiked to Rs 89.32 per litre in Delhi and to Rs 96.94 in Mumbai, according to a price notification of state-owned fuel retailers. In Calcutta, it will cost Rs 92.42 per litre.
