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As oil prices fell on the shock of a Delta variant surge around the world, Goldman Sachs lowered its forecast for third-quarter Brent crude by $ 5, to $ 75 a barrel.
Oil prices had fallen $ 5 a barrel on Monday due to an increase in the prevalence of new cases of the Delta variant coronavirus at a time when OPEC + agreed to increase production by 400,000 bbl / d to from August and an additional 400,000 b / d each month thereafter until the reduction in production is fully liquidated.
The fear is that a resurgence of coronavirus cases could trigger more restrictive measures and slow economic recovery, and therefore demand for oil.
“Our oil balance sheets are slightly tighter in 2H21 than before, with a supposed 1mb / d demand from Delta over two months more than offset by a slower production increase from OPEC +,” Goldman said.
Now Goldman is forecasting a deficit of 1.5 million bpd in the third quarter, compared to the estimate of 1.9 million bpd it had previously forecast.
But all is not gloomy for oil prices.
For the fourth quarter, Goldman is forecasting $ 80 a barrel of Brent, down from $ 75 a barrel previously, with a deficit of 1.7 million bpd in the fourth quarter of this year.
Oil prices could continue to turn dramatically in the coming weeks, given the uncertainties surrounding the Delta variant and the slow pace of supply change relative to recent demand gains, ”Goldman said.
By Julianne Geiger For OilUSD
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