Brent Crude Nears $120 as Major Banks Model Worst-Case Scenarios
Oil prices have been rising steadily since early August, hitting over $100 per barrel on Thursday and extending a rally that's impacting more than just the energy market.
The benchmark Brent crude traded near $101 after climbing almost 30% in recent weeks due to concerns about prolonged disruption to Persian Gulf exports.
Major banks such as Goldman Sachs and HSBC are now modeling scenarios where Brent reaches $120, although they don't consider it their base case.
According to Goldman's commodities team, Brent could exceed $120 if average Gulf production in 2027 remains 4 million barrels a day below pre-war levels.
The International Energy Agency expects global oil demand to decline by about 1.6 million barrels a day in 2026 due to elevated fuel costs and disrupted trade.
Naeem Aslam, chief investment officer at Zaye Capital Markets, said 'supply tightness supports prices, but demand destruction can cap the upside if crude remains elevated for too long.'