- Goldman Sachs Says Oil Rally Can’t be Sustained
Despite the surged in global oil prices and uncertainty following the assassination of Qasem Soleimani, Iran’s Major General, Goldman Sachs, one of the world’s leading investment banks, said the oil rally can’t be sustained as widely predicted except supplies of the commodity are affected.
In a note issued by the bank on Monday and published by Bloomberg, it stated that Iran retaliation is unlikely to affect oil-producing assets.
“It is not a given that any potential retaliation by Iran would target oil producing assets,” Goldman analysts stated in a note released on Monday.
According to Goldman Sachs, the rally was inspired by fear amid a sudden rise in global risk after Donald Trump-led administration killed Qasem Soleimani on Friday in Iraq.
It, however, stated that rally would only be sustained if actual oil supplies are disrupted.
Brent crude oil, against which Nigerian oil is measured, rose to $69 a barrel on Monday before pulling back slightly on Tuesday to $68.26.
The U.S foreign mission in Iraq and the entire Middle East has instructed all Americans in the region to leave as Iran threatened to retaliate.
“U.S. citizens living and working near military bases and oil and gas facilities and other critical civilian infrastructure, particularly in the Eastern Province and areas near the border with Yemen, are at heightened risk of attack,” the U.S. embassy said, acknowledging a higher risk to the oil facilities in Saudi Arabia.
President Trump, however, responded via Twitter on Sunday, saying “should Iran strike any U.S. person or target, the United States will quickly & fully strike back, & perhaps in a disproportionate manner.”