Oil prices to reach $65 per barrel in Q321on better demand prospects: Goldman Sachs

The Goldman Sachs is expecting oil prices to surge to record highs in the third quarter of 2021 on better demand prospects and a potential easing of restrictions meant to curb the coronavirus pandemic.

The investment bank updated its energy market forecast on Tuesday by saying that the price of Brent crude benchmark would reach  $65 per barrel in the third quarter next year.

It also revised its projection for the price of West Texas Intermediate and said it could surge to $55.88 a barrel, up from an earlier forecast of $51.38 a barrel.

Analysts in the bank said, however, that oil prices would end lower by the end of 2021 although they insisted that demand for oil, especially in the travel sector, would increase after effective vaccines are developed to contain the COVID-19, the disease caused by the new coronavirus.

“There is a growing likelihood that vaccines will become widely available starting next spring, helping support global growth and oil demand, especially jet,” they said in a note.

China no longer interested in expensive Saudi oil: Report

An Oilprice analysis shows China has significantly reduced its imports of oil from Saudi Arabia.

Goldman Sachs had earlier expected that crude outputs would only return to their pre-pandemic levels in early 2022, adding that production would remain largely low both due to pandemic impacts and an agreement between major oil producers to maintain supply cuts throughout next year.

Prices reached their highest levels in five months earlier this week on news that China was recovering economically and also an announcement from the United Arab Emirates that it would cut supplies by as much as 30 percent in October.

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