[ad_1]
Brent crude could hit $ 60 a barrel by next summer as travel restrictions ease, Bank of America said, citing growing optimism about Covid-19 vaccines.
The easing of restrictions will lead to increased demand for oil, the bank said, as quoted by Bloomberg, and this will drive prices up as it creates a 1.6 million barrels a day deficit by mid-2021.
Vaccine optimism has already pushed oil prices to highs in eight months, despite warnings it’s too early to get into the vaccine hype, which this month alone spurred a 25% rise in oil prices, according to Bloomberg. .
The increasingly likely extension of OPEC + production cuts also helped prices. The cartel will meet next week to discuss the extension. According to a forecast by Goldman Sachs, OPEC + will extend current cuts of 7.7 million barrels per day by three months, which would push Brent crude to $ 47 a barrel.
Interestingly, it was Bank of America analysts who last week warned against over-optimism based on the latest vaccine updates from Pfizer, Moderna, and AstraZeneca.
“Let’s say credit and stock prices will peak in the coming months for peak positioning, peak policy, peak profits, as optimism is at its peak before vaccine distribution,” they said.
Even so, merchants are buying the hype in droves. Even bearish news such as the EIA’s latest weekly update which showed U.S. oil production had risen to 10.9 million barrels per day and an inventory estimate reported yesterday by the American Petroleum Institute didn’t stop. the rally. Related: Venezuela Arrests Oil Workers to Cover Up the Bad Press on PDVSA
“The fight against the coronavirus is escalating and proving to be increasingly successful within the week,” said PVM analyst Tamas Varga, as quoted by the Financial Times. What started as a rally out of fear of losing something, according to him, has now become a “fundamentally justifiable price increase.”
For Goldman Sachs, the OPEC + pact carries greater weight.
“We continue to see coordinated action to reduce production as the optimal short-term action, given the still high excess inventory and with the current wave of infections surprising in scale and intensity,” the bank said. as quoted by the FT.
By Irina Slav for Oil “
Other main readings from Oil “:
.
[ad_2]
Source link
