In its latest client note, global investment banking giant Goldman Sachs believes United States’ decision to end exemptions from sanctions for countries still buying oil from Iran to have limited impact on crude prices, even though the timing is likely to have caught energy market participants by surprise.
“While we acknowledge the near-term upside price risks, we reiterate our fundamentally derived Brent price trading range of $70-75 per barrel for the second quarter of 2019,” the U.S. investment bank said in a research note published on Monday.
The bank still expects declining prices into 2020 due to better supplied markets next year and high uncertainties around whether the Organization of the Petroleum Exporting Countries (OPEC) and fellow producers will continue to abide by their agreement to curb output to support prices after June.
Recall, in a statement on Monday, world’s largest economy, said it will not renew exemptions on waivers, adding that the U.S, Saudi Arabia and the United Arab Emirates will ensure there is enough oil supply in the global market as waivers currently granted to Turkey, South Korea, China, Indian, Japan, Greece, Italy and Taiwan is expected to expire on May 2, 2019.
International benchmark Brent crude traded at $74.49 Tuesday morning, up around 0.61percent, while U.S. West Texas Intermediate (WTI) stood at $65.93, almost 0.6% higher.
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