Investment bank Goldman Sachs said that the new US administration’s plans to inject huge financial stimulus, and not to rush too much to lift sanctions on Iran, are two positive factors that will support oil and gas prices.
The bank said in a note: “In our estimates, a $ 2 trillion stimulus over the period 2021-2022 will boost US demand by about 200,000 barrels per day.”
US President Joe Biden proposed a stimulus package worth 1.9 trillion dollars to stimulate the economy and accelerate the distribution of vaccines to control Covid-19, which has hurt global demand for oil.
Oil prices fell on Friday due to fears that new restrictions to combat the pandemic in China will curb demand for fuel in the world’s largest importer of crude.
The bank also said that the Biden administration is considering strengthening and prolonging nuclear restrictions on Iran, and that the country’s oil exports will remain modest this year and at 0.5 million barrels per day in the second half of 2021.
White House spokeswoman Jane Psaki said the Iran issue will be part of President Joe Biden’s early consultations with his foreign counterparts and allies.
The bank said, “The delay in the full return of Iran’s production will reinforce our optimistic outlook for oil prices, as we already expect a scarcity in the oil market in 2022 with the decline in OPEC’s spare capacity.”