The rapidly heating up situation in Syria has pushed Brent crude prices to US$72 a barrel, something that Goldman Sachs had predicted on Thursday. The investment bank’s stance on commodities in general is very upbeat because of the Middle East situation as well as the latest round of U.S. sanctions against Russia.
“With low cross-asset correlations, increasing inflationary risks, a positive carry and the potential for oil supply disruptions in the Middle East, the strategic case for owning commodities has rarely been stronger,” Goldman analysts said, reiterating their “overweight” stance on commodities.
It seems the latest developments in Syria are such a strong tailwind for oil prices that even the re-imposition of U.S. sanctions against Iran is unlikely to have a major impact on oil markets immediately. However, if Iranian production does decline following the reintroduction of sanctions, this could push oil prices up by another US$7 a barrel. Read More