Geopolitics could move Brent crude higher by around $10 per barrel, Goldman Sachs has estimated, from a starting point in the mid-$70s. However, the bank admitted oil could top $90 in case of Iranian supply disruption.
Expectations for a weaker dollar in 2025-2026 are being gradually reconsidered as Donald Trump’s re-election and the prospect of stronger-than-expected US economic performance improved the outlook of the greenback.
Rising geopolitical risk pushed Brent well past $80 last week, but the brief price rally has been dampened by continued economic concerns and a strong supply situation.
Oil prices have gained some upward momentum in the last week, driven by geopolitical tensions and inventory drawdowns.
Analysts continue to debate just how serious the geopolitical risks are and whether spare capacity and new production will be able to counter supply issues.
Seasonal shifts in demand, coupled with anticipated interest rate cuts, look set to push oil prices higher in the near future.
February WTI crude oil (CLG24) on Thursday closed up +0.65 (+0.91%), and Feb RBOB gasoline (RBG24) closed up +4.70 (+2.27%).