Goldman Sachs expects Brent Crude prices to average over $100 per barrel this month as the Middle East war continues to choke supply, the investment bank said on Friday, noting that prices could surge even higher if the biggest oil supply disruption in history extends into months instead of weeks.
Analysts at Goldman Sachs see the average Brent Crude price at $85 per barrel in April, they said in a note carried by Reuters.
The new estimates follow Thursday’s price forecast update in which Goldman Sachs hiked its Brent Crude forecast to $71 per barrel in the final quarter of the year, and sees WTI Crude averaging $67 a barrel in Q4, up from $66 and $62 per barrel previously, respectively.
The fourth-quarter forecast could be quite conservative if the disruption at the Strait of Hormuz extends to two months, Goldman Sachs warned.
If this is the case, the average Brent Crude price could be as high as $93 per barrel in the fourth quarter, with major spikes above $100 in the coming weeks, according to Goldman’s analysts.
Related: Six Stocks That Could Soar in an Era of Regional Instability
Early on Friday in Asian trade, Brent Crude prices were up by 2% and traded above $102 per barrel, while the U.S. benchmark, WTI Crude, was trading above $97 a barrel.
Oil prices were set for a weekly gain despite attempts from the IEA and the Trump Administration to calm market jitters about the huge loss of oil supply.
Neither the IEA-coordinated release of record 400 million barrels of oil stocks nor the U.S. waiver allowing Russian oil sales from floating storage for a month managed to rein in the price increase.
These measures will take weeks to put actual barrels on the market, during which time the Strait of Hormuz is still blocked for tanker traffic with no signs of de-escalation in the conflict that is now engulfing oil ports in Oman and the UAE, making the entire region too high-risk for tankers.
By Tsvetana Paraskova for Oilprice.com
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