Goldman Sachs Still Says Brent Crude Oil Will Hit $80 By Year’s End

November 2, 2018, 12:10 PM UTC

U.S. oil prices are at a six-month low and saw an especially sharp drop in October. Record production in the U.S. and an agreement by OPEC to raise supply may be responsible. But the bank Goldman Sachs says there are reasons to believe that prices for a barrel of Brent crude oil will rise above $80 before the end of the year, according to

Many sources, such as oil trader Vitol, have been predicting weaker demand as trade wars harm businesses and create uncertainty and emerging markets suffer from a strong dollar.

But Goldman figures China is outpacing other emerging markets and may be consuming internal reserves, which would make its import data look deceptively low.

Another reason for a price rebound is the renewed U.S. oil embargo against Iran that takes effect next week: Iran represents more than 2% of the global oil supply. Because OPEC recently boosted production, it also has room to tighten it if prices fall too low for its liking.

“Some market observers thought at the beginning of October that the price would climb to $100, begging the question of what has changed so fundamentally in the past 3-4 weeks. What has changed above all is market sentiment, as evidenced by the massive withdrawal of speculative financial investors,” Commerzbank said in a note.