Oil futures were on track to post a loss of more than 7% this week, the highest number since October, but analysts at Goldman Sachs have suggested prices are only resting from a major rally. the raw that is to follow.
The recent pullback in oil prices is only a “stagnant stop in a relatively large oil price rally and a strong buying opportunity,” Goldman Sachs analysts wrote in a note dated. Thursday.
“
The recent pullback in oil prices is simply “a stagnant stop in the gathering of such huge oil prices and a strong buying opportunity.”
”
For the week, month-on-month contract prices for U.S. West Texas Intermediate crude CLJ21 benchmark,
CL.1,
they traded 7.4% lower, and Brent crude BRNK21,
BRN00,
the criterion was global, down 7.6%. Prices for the pair were looking at their biggest weekly percentage loss since the week ended Oct. 30, according to Dow Jones Market Data.
Renewed locks in Europe and safety concerns over AstraZeneca COVID-19 vaccine have raised concerns about slowing down energy demand, dragging WTI and Brent oil prices on Thursday to their lowest settlements in excess. two weeks.
Read: Finland bans use of AstraZeneca shots despite EU regulator support this week
In a note dated Thursday, Goldman Sachs analysts said the move for oil prices reflects, in part, “concerns about [European Union] vaccines and COVID issues as well as the soft body oil market, ”exacerbated by the strength of the U.S. dollar and the recently added lack of estimated length.
Despite the huge losses, Goldman Sachs still forecasts a “rapid oil market rebalancing in the coming months.”
The oil market has remained in a sharp deficit of 2.5 million barrels per day since February, even as Iranian exports have climbed by about 700,000 barrels per day so far, analysts said.
While EU demand and Iran’s supply heads would delay second-quarter market rebalancing by 750,000 barrels per day, analysts expect the production cuts by the Organization of Petroleum Exporting Countries and their allies , together with the so-called OPEC +, “oppose those given signs of higher shale activity” and “OPEC +“ seeking a tight oil market. ”
Goldman Sachs analysts said they now forecast OPEC + to increase production by 2.8 million barrels per day by August, setting a “relatively downward risk” for prices.
However, they see “significantly higher prices” ahead, with their Brent forecast rising from $ 65 in March to $ 80 in the summer, as “demand signals” in high-vaccinated areas. comforting those “above their consensus expectations.”