SEATTLE (Oil Monster): Brent crude oil prices are likely to remain in the range of $80 to $90 per barrel until clarity is obtained on relations between the United States and Iran, according to a new outlook from Goldman Sachs.
According to Goldman Sachs, Brent crude's current fair value is close to $80 per barrel, suggesting only a limited geopolitical premium despite ongoing tensions in the Middle East. Brent crude was trading near $85 per barrel on Tuesday as markets reacted to mixed developments in the region.
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Goldman Sachs noted that uncertainty continues over whether Washington and Tehran will reach a new nuclear agreement or whether the conflict could intensify further. The bank expects oil prices to remain within the current trading range until one of these outcomes becomes more certain.
The report also highlighted that global crude supplies have tightened over the past two weeks. Also, lower exports from the Gulf region, reduced Russian shipments, and stronger import demand from Asia have led to a significant decline in oil inventories.
According to the bank, oil exports from Gulf producers have dropped significantly compared to pre-conflict levels. Shipping disruptions in the Red Sea have resulted in a substantial reduction in tanker activity. All these factors continue to support international crude prices, Goldman Sachs noted.
