FX168 Financial News (North America) reports that oil prices are expected to rise sharply this summer due to transportation and refrigeration demand. Goldman Sachs analysts predict that the price of Brent crude oil will rise to 86 US dollars per barrel, which is almost 7% higher than the current level.
On Monday, the price of West Texas Intermediate crude was slightly above $76.50 per barrel, while the international benchmark price of Brent crude was above $80.50 per barrel.
Daan Struyven, Goldman Sachs's head of petroleum research and management, wrote: “We expect healthy consumers and strong summer demand for transportation and refrigeration equipment will drive the market to a significant third-quarter deficit.”
Analysts and their team expect the price of Brent crude to rise to $86 per barrel in the third quarter, adhering to their price range forecast of $75 to $90 per barrel.
Oil prices have been on a downward trend since April, and recently the decline was intensified when the oil union OPEC+ said it would gradually cancel some voluntary production cuts starting in October.
A gradual reduction in production should discourage excessive prices, and if prices fall too much, purchasing activity will increase.
The analyst wrote, “We still think $75 per barrel is Brent's bottom line. On the one hand, actual demand for oil, including demand from large economies, tends to rise when prices fall.”
Last week, the Ministry of Energy announced a new tender project to purchase an additional 3.1 million barrels of crude oil, after recently purchasing 3 million barrels for strategic oil reserves.
Last week, J.P. Morgan analysts said that the recent pullback in oil prices may be temporary.
“The reduction in summer inventories should be enough to bring Brent crude back to a higher level of $80 to $90 per barrel in September,” Natasha Kaneva, head of global commodity strategy at J.P. Morgan Chase, wrote in a report on Thursday.
Wall Street generally predicts that a slowdown in demand growth and an increase in supply next year will cause oil prices to fall. J.P. Morgan analysts predict that Brent crude oil will average $75 per barrel in 2025, which is significantly lower than $83 in 2024.
Goldman Sachs kept its target for next year unchanged at an average of $82 per barrel.
“The energy complex continues to recover from the OPEC+ statement,” said Daniel Ghali, commodity strategist at TD Securities (TD Securities). Crude oil “appears to be breaking out of the shock zone.” However, as the price of Brent crude breaks above $80 per barrel, the algorithm may enter the market and push the price higher.
Investors are currently awaiting monthly oil reports from the US government, the International Energy Agency, and OPEC+ to be released on Tuesday and Wednesday, which will inform the outlook for the rest of the year. The Federal Reserve will also announce interest rate decisions in the middle of this week.