Goldman Sachs said a strong rebound in global oil demand could push Brent crude oil prices above its year-end forecast of $90 per barrel.
The U.S. investment bank said it expected oil demand will shortly reach pre-COVID-19 levels of around 100 million barrels per day (bpd) as consumption in Asia rebounds after the Delta COVID-19 wave.
In addition, the bank estimated gas-to-oil switching may contribute at least 1 million bpd to oil demand.
“While not our base-case, such persistence would pose upside risk to our $90/bbl year-end Brent price forecast,” Goldman said in a research note dated Oct. 24.
Tight global supply and strong demand have pushed oil prices to multi-year highs, with U.S. West Texas Intermediate crude futures trading at $84.38 a barrel and Brent crude futures at $86.26 by 0731 GMT on Monday.
“We would need prices to rise to $110 /bbl to stifle demand enough to balance the market deficit we currently see in 1Q22 given our expectation that OPEC+ continues on the current path of +0.4 mb/d per month increases in quotas.”
The Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+ earlier this month said it would continue an existing deal under which it agreed to boost output by 400,000 bpd a month until at least April 2022.
