Oil may rally to as much as $120 a barrel if attacks on shipping in the Middle East increase, according to Goldman Sachs Group Inc., which recommended bets on natural gas and diesel as a way to capture gains.
Brent crude is seen averaging $85 per barrel this year, and West Texas Intermediate could see an average price of $79, Goldman Sachs commodity analysts said in a note released Sunday. They added that the supply loss from the crisis is going to peak at 17 million barrels daily.
As regards OPEC+ production policy, the analysts said that “While OPEC+ policy remains flexible, we assume OPEC+ will keep its production quota unchanged after September as we expect the pace of builds in OECD commercial stocks to accelerate and seasonal demand tailwinds to fade away.”