Tight oil market in first half could push crude to $65, says Goldman | Reuters

Tight oil market in first half could push crude to $65, says Goldman | Reuters

Oil prices could rise to $65 a barrel by July amid a tight oil market and slow rebound in demand, Goldman Sachs said.

The bank said in a note on Sunday data indicated a deficit of 2.3 million barrels per day (bpd) in the fourth quarter of 2020 driven by higher demand and lower supplies from producers outside the OPEC+ group.

It forecast a deficit of 900,000 bpd in the first half of 2021, a higher level than its previous prediction of 500,000 bpd.

This could help push benchmark Brent crude to $65 a barrel by July, with less industry investment in supply skewing risks to the upside in 2022, the bank said. Brent was above $55 on Monday.

“We are moderating the demand rebound to account for a slower start of vaccination and a cautious pace of reopening, leading in particular to a slower recovery in jet demand,” Goldman said.

The bank expected demand to rise by 5.3 million bpd in the six months to July, down from its previous forecast of 6.8 million bpd.