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- Brent to reach $65 this summer – Goldman Sachs
Brent to reach $65 this summer – Goldman Sachs
FXStreet reports that analysts at Goldman Sachs discuss Brent prospects.
“With vaccines being rolled out across the world, the likelihood of a fast-tightening market from 2Q21 is rising as the rebound in demand stresses the ability of producers to restart production.“
“While higher prices pose the risk of a shale response - as WTI spot prices are now at $50/bbl allowing for higher activity and positive free cash flows - we see this response remaining muted in the first instance, as higher capital costs and producer discipline curtail the US E&P's reaction function. “
“Moreover, OPEC+ March production level will still be near the recent lows just as global demand starts rebounding sharply driven by warmer weather and rising vaccinations.”
“We continue to recommend a long Dec-21 Brent trade (currently trading at $53/bbl vs. our $65/bbl forecast) and expect sustained backwardation and lower implied volatility.”
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