Crude prices climbed on Friday, with Brent crude hitting $70 a barrel, as the market continued gains from overnight after an optimistic outlook on the oil market by Goldman Sachs.
The investment bank said it believed the oil market was now more balanced after the US shale rush of 2014-16 oversupplied the market and saw crude prices drop below $30 a barrel in January 2016.
Goldman said that thanks to supply-demand fundamentals returning to a finer balance, it now believed Brent crude would reach $82.50 a barrel within six months.
“The rebalancing of the oil market has likely been achieved, six months sooner than we had expected,” the bank’s analysts said in a report, as it revised higher its global demand growth forecast to reflect surging imports from emerging markets.
Goldman Sachs has been noted in the past as having a bullish outlook on the global oil market.
Back in 2008 when prices nearly touched $150 a barrel, analysts Arjun Murti, Kevin Koh and Michele della Vigna predicted crude prices could surge as high as $200 a barrel if a major disruption were to affect supply.
Investors chose to ignore data this week that showed increases in US crude stockpiles. Accompanying data showing that refinery throughput had dropped helped to explain the inventory gains and traders remained bullish.
On Friday, the price of Brent crude was up 0.09% to $69.85 a barrel, having earlier returned to the $70 level after three days.
Nymex West Texas Intermediate, the US benchmark, rose 0.09% to $65.86 a barrel.