Oil prices climbed higher throughout the week, and one bank sees it as the start of a broader rally. Goldman Sachs is calling for crude oil prices to rise more than 10% over the next few months as oil demand climbs back to pre-COVID levels and interest rates remain low. In addition, the US’s relative strength will wain as other countries sure up their vaccine programs, which will weaken the US Dollar. Goldman expects this confluence of factors will push US oil prices to $77/bbl before the end of 2021.
This week, the EIA’s inventory data was slightly bullish, with crude building less than expected and diesel stocks showing a strong draw. Gasoline demand numbers were a bit disappointing, coming in at 8.9 MMbpd. That’s a bit below normal April levels, but still a strong showing after last year. In other government data, the Labor Department noted that jobless claims fell to just 553,000 last week, the lowest since the start of the pandemic.
Although America’s vaccine deployment has been a bright spot, other countries are still struggling with controlling the pandemic. India set numerous new daily records this week as cases continued soaring. Supplies from other countries should help, and India received its first aid package from the US this week. Looking ahead, developing countries will be the lynchpin in the oil demand recovery. If they can roll out vaccines efficiently and curb losses, Goldman’s estimate of rebounding global oil prices just might prove correct.
This Week in Energy Prices
Crude oil prices started off the week at an opening price of $62.06, decreasing slightly Tuesday, but then rising the remainder of the week. Friday’s opening price of $64.88 was the highest in a two-week period and showed a change of $2.82 from Monday to Friday.
Today, diesel opened with a price of $1.9550, an increase of $0.0807 from Monday’s opening price of $1.8743. Friday’s opening price of $1.9550 was a two-week high in opening price of diesel and rose slowly throughout the entire week.
On Friday, gasoline opened at a price $2.0979, resulting in a change of $0.1048 from Monday’s opening price of $1.9931. Similar to diesel and crude, gasoline prices slowly increased throughout the entire week with Friday’s opening price also resulting in a two-week high.