Oil little changed – Goldman forecast Brent hit $65 by this summer
Oil little changed as renewed lockdowns balance output restrictions
Oil prices were little changed on Monday as tough coronavirus lockdowns around the world renewed concerns about global fuel demand, while a stronger U.S. dollar also weighed on prices.
U.S. West Texas Intermediate crude settled 1 cent higher at $52.25 per barrel. International benchmark Brent crude fell 33 cents, or 0.6%, to settle at $55.66 per barrel.
“The renewed concerns about demand due to very high numbers of new corona cases and further mobility restrictions, plus the stronger U.S. dollar, are generating selling pressure,” Commerzbank analyst Eugen Weinberg said.
Worldwide coronavirus cases surpassed 90 million, according to a Reuters tally.
Despite strict national lockdowns, Britain is facing the worst weeks of the pandemic, and in Germany cases are still rising.
Mainland China saw its biggest daily increase in virus infections in more than five months, authorities said, as new infections rose in Hebei, which surrounds the capital, Beijing. In Shijiazhuang, the provincial capital and epicentre of the new outbreak, people and vehicles are barred from leaving, as authorities seek to rein in the spread.
A stronger dollar, supported by hopes for more stimulus to boost the world’s largest economy, also weighed on oil prices. Oil is usually priced in dollars, so a stronger dollar makes crude more expensive for buyers with other currencies.
Monday’s losses follow a strong week for oil prices. Brent and WTI rose almost 8% last week, supported by Saudi Arabia’s pledge for a voluntary oil output cut of 1 million barrels per day (bpd) in February and March as part of a deal for most OPEC+ producers to hold production steady.
Brent oil to hit $65 by this summer, according to Goldman Sachs
Goldman Sachs is pulling forward its oil forecast following OPEC’s meeting last week as well as the Georgia run-off elections, both of which the firm said will help neutralize near-term risks.
Goldman now sees Brent hitting $65 per barrel by this summer, ahead of prior forecasts for the contract to reach that level by the end of the year.
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