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Brent Oil Climbs Back As Goldman Sachs Sees More Gains
Oil & Gas | 22 February 2021

Brent oil resumed gains as the market evaluated the fallout from the big freeze across Texas, with Goldman Sachs Group Inc. predicting prices will advance into the $70s in the upcoming months.

Futures in London rose back above $63 a barrel on Monday after fluctuating at the end of last week as U.S. production slowly resumed following the frigid weather that had put prices under pressure on Friday.

A robust recovery in demand from the Covid-19 outbreak had pushed prices to the highest settlement in over a year last Wednesday, and Goldman sees the rally accelerating as consumption outpaces supply from OPEC+ and shale. Crude oil stored at sea fell to an 11-month low last week, according to Vortexa, another sign of dwindling supplies.

Meanwhile, Saudi Arabia and Russia, are heading towards an OPEC+ meeting next week with differing opinions on adding more supply to the market in April. The kingdom wants to hold output steady, according to delegates, but Moscow is indicating that it still wants to proceed with an increase.

Crude has gained more than 20% this year after a January pledge from Saudi Arabia last month to deepen production curbs turbo-charged a rally triggered by Covid-19 vaccine breakthroughs. Brent’s prompt time spread has firmed in a bullish backwardation structure, signalling a tighter market and helping to unwind global stockpiles built up during the pandemic.


  • Brent for April settlement climbed 0.5% to $63.19 a barrel at 9:56 a.m. London time, after dropping more than 2% over the previous two sessions.
  • West Texas Intermediate for March delivery, which expires Monday, gained 0.3% to $59.42 a barrel on the New York Mercantile exchange.
  • The more-active April contract rose 0.4% to $59.47

Goldman raised its price estimates and is now predicting that Brent will be reaching $70 a barrel in the second quarter and $75 in the following three months, $10 above its previous forecasts, according to a note. Consumption will get back to pre-virus levels by late July, while output from major producers will remain “highly inelastic” to the rising prices, the bank said.

In the meantime, Iran and the U.S., sparred over how to revive a nuclear deal, reflecting the challenge ahead for the Biden administration even as nuclear inspectors persuaded Iran to temporarily allow some wider monitoring. Tehran over the weekend renewed its demand that the new U.S. administration re-join the accord and lift crippling Trump-era sanctions on the Iranian economy before talks can resume.


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