Oil to hit $70 in second quarter

By Lucas Ajanaku

Goldman Sachs Group Inc. has raised its price estimates and is predicting that Brent will reach $70 a barrel in the second quarter and $75 in the following three months, $10 above its previous forecasts, according to a note.

Consumption will get back to pre-virus levels by late July, while output from major producers will remain “highly inelastic” to the rising prices, the bank said.

Brent oil resumed gains as the market assessed the fallout from the big freeze across Texas.

Futures in London rose back above $63 a barrel yesterday after faltering at the end of last week as U.S. production slowly resumed following an easing of temperatures. A robust recovery from the Covid-19 outbreak had pushed prices to the highest settlement in over a year on Wednesday and Goldman sees the rally accelerating as demand outpaces supply from OPEC+, shale and Iran.

Saudi Arabia and Russia, meanwhile, are heading toward an OPEC+ meeting next week…

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