Oil could reach $ 85 in the fourth quarter!

As the world faces one of the most severe frosts expected over the coming winter, global investment bank Goldman Sachs said a colder winter, with natural gas prices higher in the world, could result in higher than expected oil prices at the end of this year, with the possibility of oil reaching $ 85 per barrel in the fourth quarter.

Goldman has raised its previous forecast for oil prices to $ 80 a barrel for the fourth quarter of 2021 because it believes the natural gas crisis, as well as a colder-than-normal winter in Europe and Asia may present upside risk of $ 5 per barrel. compared to the fourth quarter, according to a note cited by Reuters, and reviewed by Al Arabiya.net.

“The tightening of global gas supplies creates a clear and potentially significant upward catalyst for the oil market this winter, which outweighs the risk of declining global oil demand from another wave of delta-type Covid.” , wrote analysts at Goldman Sachs.

According to the investment bank, demand for oil could jump 900,000 barrels per day if the coming winter is colder than usual in the northern hemisphere.

Tense gas markets in Europe, weak winds, abnormally low gas stocks, as well as record carbon prices have combined in recent weeks to send record gas prices on the continent and energy prices in biggest economies at record levels. Record natural gas prices in Europe are also pushing up liquefied natural gas (LNG) spot prices in Asia to record levels for this time of year as well.

Last week, Bank of America said oil prices could hit $ 100 a barrel over the next six months if we had a colder-than-normal winter, which could be the biggest driver of global markets. energy over the next few months.

Bank of America expects oil prices to rise amid a modest market deficit in the coming months. He also sees the possibility of oil hitting $ 100 a barrel earlier than its mid-June 2022 call if the winter is colder than usual.