Renewed Houthi strikes on Saudi energy sites and US-Iran clashes over the Strait of Hormuz are lifting Brent crude (BRENT) near $100 a barrel, prompting Goldman Sachs to raise its year-end forecasts.
Oil prices climbed toward $100 a barrel on Tuesday as renewed attacks on Middle Eastern energy infrastructure and shipping intensified concerns about global supply, reports IBTimes.
The immediate catalyst was a wave of Houthi attacks on southern Saudi Arabia, with reported strikes on energy and civilian facilities in several cities, including Jazan, Abha, Najran and Khamis Mushait.
The attacks injured 73 people and caused fires and temporary shutdowns at some energy sites.
Over the weekend, US forces struck three Iranian crude oil tankers after Iran’s Revolutionary Guard Corps launched ballistic missiles at two American Navy warships, according to U.S. Central Command.
The bank now expects Brent to trade at $85 a barrel in December and WTI at $80, both $5 above its previous estimates.
Goldman warned that Brent could reach or exceed $120 if Gulf production and exports remain significantly constrained, particularly if attacks on vessels in the Strait of Hormuz and Red Sea intensify.
Crude prices have not risen even further because the market has been able to tap several sources of supply to cushion the shock.
Goldman Sachs analysts said commercial oil inventories across OECD countries have seen relatively modest declines, while governments have released strategic reserves. Additional barrels have come from oil already in transit and stockpiles held in China.
Those sources have helped limit the size of the price spike, but the available buffers are finite.
The national average gasoline price reached $4.15 a gallon on Tuesday, according to AAA, compared with $4.02 a month earlier.
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