Goldman lifts oil price forecasts

(Sharecast News) - Goldman Sachs lifted its oil price forecasts as it cited lower Persian Gulf production.

For the final quarter of the year, the bank now expects Brent crude to trade at around $90 a barrel and West Texas Intermediate at $83, up from previous forecasts of $80 and $75, respectively, if oil exports normalise by the end of June.

The bank said: "We now assume a normalisation in Gulf exports by end-June (versus mid-May prior) and a slower Gulf production recovery.

"The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, products shortages risks, and the unprecedented scale of the shock."

Goldman said that in an adverse scenario, Brent would average just over $100 in the fourth quarter, assuming Gulf exports only normalise by end-July.

In a severely adverse scenario, Brent would average at nearly $120 assuming Gulf exports normalise by end-July and there is a 2.5m barrels per day persistent reduction to Gulf capacity.