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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Goldman: Brent Oil To Reach $70-$75 Soon

As the oil market continues to tighten significantly, Brent Crude oil prices could reach $70 to $75 a barrel in the near term, with an upside potential of exceeding the $67.50 a barrel forecast, according to Goldman Sachs.

The outlook for the oil market through the end of June 2019 is modestly bullish, Reuters quoted the investment bank as saying in a research note on Monday.

Yet, Goldman Sachs sees a possible Brent Crude jump into the $70s as fleeting, because U.S. oil exports and a possible easing of OPEC’s production cuts in the second half of the year could cap the bullish sentiment.

“The oil market will likely continue to tighten significantly this March and April,” Bloomberg quoted Goldman’s note as saying.

OPEC’s cuts and possible acceleration of Venezuela’s supply disruptions will support oil prices in the coming months, according to the bank.

“While prices could easily trade in a $70-$75 a barrel trading range, we believe such an environment would likely prove fleeting,” said Goldman’s analysts, who kept their end-of-the-year Brent Crude forecast at $60 a barrel.

Last week, oil prices hit fresh 2019 highs, driven up by optimism that the U.S. and China will forge a trade deal and that OPEC’s resolve to rebalance the market will outweigh soaring U.S. oil production.

At the beginning of this week, oil prices fell somewhat after U.S. President Donald Trump, once again, asked OPEC not to take too much crude off the markets. At 11:03 a.m. EST on Monday, WTI Crude was down 2.58 percent at $55.78, and Brent Crude was trading down 2.39 percent at $65.64.   Related: The $32 Trillion Push To Disrupt The Entire Oil Industry

Earlier this month, Goldman Sachs said that it expected Brent Crude prices to hit US$67.50 a barrel in the second quarter of the year as ‘shock and awe’ production cuts by OPEC and increased supply disruptions couple with healthy demand and seasonal inventory declines to drive prices higher.

“Producers are adopting a ‘shock and awe’ strategy and exceeding their cut commitment,” the investment bank said in a research note from February 12.  

“The production losses to start 2019 are already larger than we expected,” Goldman said, noting that more disruptions could be coming due to the U.S. sanctions on Venezuela’s oil industry.

By Tsvetana Paraskova for Oilprice.com

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