Analysts at the US bank Goldman Sachs have raised the price forecast of crude oil by $10 per barrel for the second and third quarters of 2021.
They base the prediction on the fall in supply and rising costs.
Goldman Sachs said on Monday that Brent is likely to average $65/bl in the second quarter and $75/bl in the third quarter.
Its previous forecasts were $10/bl lower in each case.
According to the bank, the main catalysts for rising prices include low inventories, higher costs and speculative inflows.
“We now believe that oil prices will rally sooner and higher than our previous $65/bl summer forecast because of fundamentals, higher marginal costs — as least in the short run — as well as the ongoing reflationary asset rotation,” it said in a note, quoted by Argus Monday.
Goldman Sachs expects Brent to average $70/bl in both the fourth quarter and in 2022, up by $5/bl from previously.
Goldman Sachs has also said beyond expectations, demand and supplies have rebalanced faster than was expected during the winter and the deficit is likely to broaden the northern hemisphere spring because the rise in Opec+ production delays the recovery in demand.
Any rise in Iranian exports will most likely take months to materialise and this is accommodated within an aggressive increase in the amount of Opec+ output.
“This increases our conviction in a tight oil market this summer when we expect OECD inventories to normalise,” the bank said.
Brent crude futures have risen by almost 14 per cent in February to trade at $63.58/bl at 04:00 GMT today.