Global oil prices gained on Monday despite the cautionary nature of the oil market.
Brent crude oil, against which Nigerian oil is priced, gained 72 cents or 1.1 percent to $67.16 per barrel while the U.S West Texas Intermediate stood at $64.25 a barrel at 9:23 am Nigerian time on Monday.
Oil fell by 3 percent last week following Iran’s president, Hassan Rouhani’s announcement that the United States was ready to lift nuclear sanctions imposed on the Gulf nation.
“Iran’s oil production has been rising in recent months, likely in anticipation of a lifting of the sanctions,” ANZ analysts said in a note on Monday.
However, the speaker of Iran’s parliament said on Sunday that a three-month monitoring deal between Tehran and the U.N. nuclear watchdog had expired and that its access to images from inside some Iranian nuclear sites would cease.
Last week, European diplomats said failure to extend the monitoring agreement would plunge wider, indirect talks between Washington and Tehran on reviving the 2015 Iran nuclear deal into crisis. The people involved are due to resume discussions this week.
President Trump had suspended the nuclear agreement between Iran and World Powers immediately after he took over the White House, saying it was a poor deal that gave Iran too much power.
Despite oil prices hitting a record low in 2020 at the peak of COVID-19, the sanctions imposed on Iran helped ease global supply. Suggesting oil prices could have been worse.
However, Goldman Sachs believes prices could hit $80 per barrel by the fourth quarter of 2021.
The leading investment bank explained that Iran will not hit its peak right away even if sanctions were lifted as widely expected.
“Even aggressively assuming a restart in July, we estimate that Brent prices would still reach $80 per barrel in fourth quarter, 2021, with our new base case for an October restart still supporting our $80 per barrel forecast for this summer,” the bank said in a note.