Goldman Sachs has raised its Brent price forecast by $5 to $75 per barrel in the second quarter and $80 per barrel in the third quarter of this year, while Swiss bank UBS raised its forecast for the benchmark to $75 per barrel in the second half of 2021.
Analysts are reviewing their price forecasts to reflect the continued supply restraint by the Organisation of Petroleum Exporting Countries and its allies (together called OPEC+), which has boosted prices in recent months. As of the time of writing, Brent was moving towards $70, trading around $68.30 and up 1.9% for the day.
Also Read: Analysts See Brent Crude Reaching $80 this year as Oil Surges
Oil prices have soared since the start of November, from when it has risen 75% and by around 26% since the beginning of the year. Brent crude prices rose above $60 a barrel in early February, the first time they had exceeded pre-Covid-19 values.
The return of oil prices to pre-pandemic levels will be crucial to the recovery of major oil-producing countries in the Middle East and Africa such as Nigeria, which relies on crude sales for the bulk of its foreign exchange earnings and government revenues.
Also Read: Oil Approaches $60, What it Means for Nigeria
OPEC+ ministers at its meeting on Thursday agreed to maintain existing production curbs and not increase supply in April as they wait for a more substantial recovery in demand amid the coronavirus pandemic but granted small exemptions to Russia and Kazakhstan.
More so, Saudi Arabia is maintaining its voluntary cut of 1 million barrels per day through April despite the oil prices rally over the past two months.
Goldman has praised the supply strategy being employed by OPEC+, saying it is working because of its “unexpectedness and suddenness.” The cartel’s decision came as a surprise to many, with most analysts and experts predicting additional supply before the meeting.
Brent crude futures for May rose 83 cents, or 1.2 percent, to $67.57 a barrel at 07:09 West African Time, and was on track for a 2 percent gain in the week. Meanwhile, the United States West Texas Intermediate (WTI) crude futures were up 77 cents, or 1.2 percent, to $64.60 per barrel, reports Reuters.
