Frank Kane

DUBAI: The price of oil will reach $65 per barrel next year as an energy market recovery accelerates, according to one of the world’s leading energy analysts.

Goldman Sachs had a “growing conviction” in its increasingly bullish forecast for crude oil next year, on the rising likelihood of a vaccine against COVID-19 and the “discipline” among oil producers, including the OPEC+ alliance led by Saudi Arabia and Russia, said Damien Courvalin, head of energy research at the American banking giant.

With world output under control following the historic cuts deal announced in April, and US shale production under severe pressure, crude prices have bounced back from the wild gyrations of “Black Monday” when US oil fell below zero.

Brent crude, the global benchmark, was trading at $45.73 yesterday, near its five-month high and maintaining the consistent upturn of the past month, while West Texas Intermediate, the US standard, was at $43.

“Prices are expected to rally from $45 per barrel currently to $65 by the third quarter of 2021,” Courvalin said.

The forecast represents a growing belief among energy analysts that the price of oil will continue to rise. JP Morgan, the biggest bank in the US and another leading energy expert, has predicted a “super cycle” in oil prices as companies cut back on investment leading to shortages, while post-pandemic demand grows, with prices spiking above $100 per barrel in 2022.

Goldman Sachs’ optimistic outlook came despite slower recovery in demand in the summer months as pandemic cases rose in many parts of the world and economic lockdowns continued.

OPEC+ ministers will meet this month to discuss progress by member countries on their commitments to reduce output, and to make up for shortfalls by some in hitting those targets.