Brent is set to breach $80-mark soon

After heading to $80 per barrel in a five-day rally, brent crude futures dropped 0.2% to trade $79.36 a barrel intraday Tuesday. Traders said profit-booking at the highest level since October 2008 caused the fall in brent.

US West Texas Intermediate (WTI) crude futures dropped 0.1%, to $75.36 a barrel.

Analysts are quoted in media reports as saying that the market sentiment remained strong amid tighter supply and Brent may touch $80 a barrel soon. Goldman Sachs gas forecast brent at $90 by year-end on demand recovery from Covid-19.

Analysts further predicted that rising prices of spot liquefied natural gas (LNG) and coal may also boost oil prices further.

Brent crude on Monday rose 2.1% to hit $79.72.

Analysts also said there were concerns that surging oil prices may reduce fuel demand.

Oil exporters Nigeria and Angola are struggling to boost output to their OPEC quota due to lack of enough investment. Maintenance problems too continue to impact output, according to media reports.

Besides, other members of the OPEC+ group are also struggling to ramp up output.

While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” Goldman is quoted as saying in media reports.

Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, agreed to stick to its decision made in July to phase out record output cut.

For 2022, Goldman Sachs lowered its average forecasts for the second and fourth quarter to $80/bbl from $85/bbl as it factored in the possibility of an Iran-U.S. nuclear deal by next April, according to media reports.