Oil prices will be supported this year by the upcoming massive economic stimulus package in the United States and the low likelihood that much Iranian oil will return to the global market, according to Goldman Sachs.
The $ 1.9 trillion COVID relief program proposed by President Joe Biden is expected to boost the US economy, leading to an increase in US oil demand of about 200,000 barrels per day (bpd) in 2021 and 2022, a Reuters reported citing a note from the investment bank. as saying.
Goldman Sachs has been bullish on oil since late last year, seeing Brent Brent averaging $ 65 in 2021.
Besides a stronger economy in the United States this year, the bank expects the Iran nuclear deal problem not to be resolved anytime soon.
The Trump administration imposed sanctions on Iran’s oil exports in 2018, seeking to cut the Iranian regime’s oil sales, after the United States withdrew from the so-called Iran nuclear deal.
President Biden, however, pledged to offer Tehran a return to diplomacy and a return to the nuclear deal. In other words, if Iran returns to full respect for this agreement, hammered out when Biden was President Obama’s vice-president.
President Biden’s first talks with his foreign counterparts and allies will include Iran and current US sanctions, White House Press Secretary Jen Psaki said. This indicates that the lifting of sanctions against Iran is not an immediate priority for the US administration.
“Delays in a full return of Iranian production would strengthen our optimistic outlook for oil as we already anticipate a tight crude market for 2022 with low OPEC reserve capacity,” Goldman Sachs analysts said in the report. note.
The U.S. administration’s moratorium on all oil and gas rentals in the Arctic National Wildlife Refuge in Alaska, the revocation of the Presidential permit for the Keystone XL pipeline, and the temporary ban on the issuance of drilling permits on Federal lands and waters failing to do this, on their own, means the oil market will tighten faster in 2021-2022 than expected, according to Goldman.
By Tsvetana Paraskova for OilUSD
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