Goldman Sachs maintained its forecast of higher oil prices. This is the first analysis after the Palestinian Hamas attack on Israel. According to the investment bank, the price of Brent crude, which recently crossed the $85 threshold, will rise to $100 in mid-2024.
Goldman Sachs stressed that the events in Israel do not directly affect global mining capacity. At the same time, it is estimated that as a result, the main factors pressuring price increases will not disappear.
The bank pointed to two possible effects of Saturday’s attacks on Israel, which may affect oil supplies (production) in the future.
Brent and West Texas Intermediate crude prices – Goldman Sachs forecasts
The first, according to Goldman Sachs, is for Saudi Arabia to maintain its restrictions on oil production next year. Saudi Arabia reduced its production from 10 to 9 million barrels per day by the end of December 2023, and according to the bank, production will be gradually increased in 2024 to 10 million in early 2025.
Goldman Sachs estimated that events in Israel reduce the chances of easing restrictions faster.
The second factor is expected to be oil production in Iran. According to Goldman Sachs, there will be a gradual slowdown in Iranian production growth. The bank estimated that every PLN 100,000 barrels per day below previously assumed levels would translate into an increase in the price of a barrel of Brent crude by $1 at the end of 2024.
Hamas attack on Israel
The Islamist Hamas attack on Israel began on Saturday morning. Terrorists have infiltrated many cities in the south of the country. Israel was also attacked by thousands of missiles.
On Sunday afternoon, the Israeli military announced that it had carried out large-scale air attacks on targets in the Palestinian Authority where Hamas militants were believed to be hiding. On Sunday night and into Monday, the Israeli army announced that it was still launching air strikes on the Gaza Strip.
On Monday, at approximately three o’clock in the afternoon, the price of a barrel of Brent crude on the London Stock Exchange rose by 3.5% to $87.5, and the price of US West Texas Intermediate crude on the New York Stock Exchange rose by 3.80% to $86.
At Friday’s close, the price of a barrel of Brent crude oil was US$84.5 and US West Texas Intermediate crude was US$82.8.
The death toll from the Palestinian Hamas attack in Israel that began on Saturday has exceeded 700, with 2,382 people injured. The health ministries on both sides reported on Monday that 493 people were killed and more than 2,750 others were injured among the Palestinians.
Main image source: Bab/epa/mohamed knows
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