Crude oil price: we stick to our target of $80 per barrel – Goldman Sachs
- Goldman Sachs’ forecast of crude oil price in 2021 remains at $80.
- WTI futures are down by 0.33% at $65.77 ahead of EIA’s oil inventories data.
- API indicated that oil stockpiles dropped by 0.439 million barrels compared to the expected reading of -1.279.
Crude oil price has eased ahead of EIA’s oil inventory data on Wednesday. WTI futures are down by 0.33% at $65.77 while Brent futures are down by 0.35% at $68.27. According to Goldman Sachs’ Jeff Currie, the price will surge to $80 in the current year.
Iranian oil expected in Q4’21
Goldman Sachs has left its forecast of crude oil price unchanged at $80. During an interview with CNBC, the bank’s head of commodities research globally, Jeff Currie has indicated that the commodity’s downward movement in the past week was as a result of the market pricing in the Iranian nuclear deal.
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On the one hand, the ongoing concerns that Iranian oil will increase the commodity’s supply in the market are valid. Talks between the involved parties have made progress. Subsequently, a deal may be attained before the Iranian presidential elections scheduled for 18th June.
However, it may take longer for the Iranian oil to get into the market. It will take until October, especially if the deal is taken to the US Congress via the Joint Comprehensive Plan of Action (JCPOA). Even then, Currie has indicated that the steady rise in demand will push crude oil price to the forecasted $80 in the current year.
Weekly US oil inventories
Crude oil price is also reacting to the weekly US oil stockpile data. On Tuesday, the American Petroleum Institute (API) indicated that oil inventories had dropped by 0.439 million barrels in the past week. While the figure missed the estimated decline of 1.279 million barrels, it is a better reading that the prior week’s increase of 0.620 million barrels.
Investors are now keen on whether EIA’s data will highlight a similar trend as API. Economists expect a reading of -1.050 million barrels. In the previous release, the agency indicated that the weekly oil inventories rose by 1.321 million barrels. The figure was lower than the expected draw of 1.623 million barrels, but higher than the prior drop by 0.427 million barrels. A lower-than-expected figure will be a bullish catalyst for crude oil price.
WTI price technical outlook
Crude oil price is seesawing at $66 for the second consecutive session. At the time of writing, WTI futures were down by 0.33% at $65.77. Since the beginning of the week, it has surged by around 3.78%. On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages. Depending on the US oil inventories data, crude oil price is likely to surge to $67. On the lower side, it will probably find support at $65.