Goldman: Oil Prices To Hit $82.50 By The Summer

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Increased geopolitical tensions in the Middle East, plunging Venezuelan production, and now the U.S. withdrawal from the Iran nuclear deal could push Brent Crude prices to $82.50 a barrel by summer, Goldman Sachs said Wednesday.

On Tuesday, U.S. President Donald Trump said that the United States would withdrawfrom “an unacceptable Iran deal”, re-imposing sanctions on Tehran that “target critical sectors of Iran’s economy, such as its energy, petrochemical, and financial sectors.”

The U.S. will target Iran’s crude oil sales, and sanctions that were lifted under the deal will be re-imposed following a 180-day wind-down period, the U.S. Treasury said.

The return of the sanctions could initially reduce by 500,000 bpd Iran’s current crude oil production of 3.8 million bpd, Goldman Sachs said in a note today, as carried by Reuters.

A loss of 500,000 bpd of Iranian crude oil supply would push up oil prices by around $6.20 a barrel, according to Goldman Sachs.

“Such elevated oil geopolitical risks exacerbate the upside risks to Brent forecasts and reinforce our view that oil price volatility will continue to increase,” the investment bank’s analysts wrote.

At 11:20 a.m. EDT on Wednesday, both WTI and Brent prices were surging nearly 3 percent, with Brent touching $77 a barrel, following President Trump’s withdrawal from the Iran deal and EIA’s weekly inventory report showing draws across the board.

Commenting on the impact of the U.S. withdrawal from the Iran deal, Sukrit Vijayakar, director of energy consultancy Trifecta, told Reuters on Wednesday:

“Iran’s exports of oil to Asia and Europe will almost certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite.”

Several Asian refiners told Reuters that they were already on the lookout for alternatives to Iranian crude oil deliveries.

By Tsvetana Paraskova for

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This website has long been a critic of the useless Home Secretary, Amber Rudd. That she was wholly unsuited to the high office of Home Secretary was obvious to most. Perhaps one day she will thrive as a middle-manager in a zombie company somewhere. It astounds me that she got as far as she did.

This was the woman who referred to the terrorist attack upon the Ariana Grande concert in Manchester as a mere “incident” and whose more recent response to the use of chemical agents on the streets of this country was lamentable.

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