Crude oil is bullish for the 5th consecutive day with the global benchmark, the Brent oil futures, approaching the $80 mark amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions.
This is even as Goldman Sachs’ global head of commodities research, Jeff Currie, in an interview with Bloomberg, said global benchmark could hit $90 per barrel if the approaching winter in the northern hemisphere proves colder than normal.
The global benchmark, the Brent crude is up 1.22%, currently trading at $78.17 a barrel. This comes after gaining for the third consecutive week through Friday. U.S. benchmark, the West Texas Intermediate (WTI) is bullish at 1.22% to $74.88 a barrel, near its highest since July, after rising for 5 straight weeks.
Currie explained that the tightening of gas supplies in Europe will elevate the demand for oil as an alternative at a time when global crude output is constrained. He used the post-hurricane disruptions in the U.S. Gulf of Mexico as an example to take home his point.
This forecast comes after the banking giant had predicted $80 per barrel for oil in the summer citing higher demand for travel and acceleration of vaccinations in Europe are set to result in “the biggest jump in oil demand ever, a 5.2 million barrels per day (bpd) rise over the next six months.”
Asides from Goldman’s forecast, ANZ analysts said in the note that rising gas prices is also causing oil prices to go higher as the liquid becomes relatively cheaper for power generation. They stated, “Supply tightness continues to draw on inventories across all regions.”