Brent crude will potentially reach $120 a barrel by the fourth quarter if the disruptions in the shipments through the Strait of Hormuz goes on, Goldman Sachs Group Inc. states highlighting that this is not the company’s base case, reports Bloomberg.
“Escalation in West Asia and the decline in estimated Persian Gulf flows to below 45 per cent of pre-war levels have pushed oil prices back up,” says analysts including Daan Struyven.
Currently, Goldman predicts a drop in Brent at $80 a barrel in the fourth quarter, and $75 next year if there’s an ease in the ongoing West Asia conflict. However, prices could easily shoot higher if shipping stays disrupted in the Strait of Hormuz or the Red Sea, the analysts states.
Furthermore, analysts noted that the weaker demand from China and greater buyer flexibility may limit the expected price rise despite the declining global inventories leaving the oil market vulnerable to supply shocks.
