Goldman Sachs Group Inc. lifted its oil-price forecasts as the prolonged closure of the Strait of Hormuz spurs “extreme” inventory draws.
Brent is expected to average $90 a barrel in the fourth quarter, up from a previous outlook for $80, analysts including Daan Struyven and Yulia Zhestkova Grigsby said in an April 27 note. The bank also hiked forecasts for the current and third quarters, the latest in a series of revisions.
“We estimate that 14.5 million barrels a day of Persian Gulf crude production losses are driving global oil inventories to draw at a record 11 to 12 million barrel-a-day pace in April,” they said. “Because extreme inventory draws are not sustainable, even sharper demand losses could be required if the supply shock persists longer.”
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The global oil market has been upended by the Iran war, with a double blockade of the Strait of Hormuz
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cutting daily transits through the key chokepoint to near zero. With millions of barrels of daily supply shut-in across the region, Brent has rallied by almost 50% since the start of the conflict in late February, threatening to lift global inflation while stunting growth.
“We now assume a normalization in Gulf exports by end-June, versus mid-May prior, and a slower Gulf production recovery,” the analysts said. “The economic risks are larger than our crude base-case alone suggests because of the net upside risks to oil prices, unusually high refined-product prices, products shortages risks, and the unprecedented scale of the shock.”
Given the disruption, the bank said there would be a deficit of 9.6 million barrels a day this quarter, compared with a surplus last year.
Brent was seen at $100 a barrel this quarter and $93 in the third under the new outlooks. Futures last traded just below $108 a barrel, on course for a sixth daily gain, potentially the longest winning run of more than a year.
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