Oil futures: Brent rallies 2.3% on demand recovery hopes

London (Quantum Commodity Intelligence) – Crude oil pushed higher Monday as investment bank Goldman Sachs maintained its bullish outlook for the demand recovery, while doubts have been cast over an immediate deal with Iran when talks resume in Vienna Monday.

Brent futures for front-month July were trading at $68/b (1530 GMT), compared to Friday's settle of $66.44/b, a gain of 2.3%.

At the same time July WTI was trading $65.18/b, up 2.5% from Friday's settle of $63.58/b.

Oil prices retreated last week on reports of constructive talks for a deal that would lift oil, shipping and banking restrictions against Iran.

On Sunday US Secretary of State Antony Blinken raised doubt Tehran's commitment to the deal.

"We know what sanctions would need to be lifted if they're inconsistent with the nuclear agreement," he said. 

"Iran, I think, knows what it needs to do to come back into compliance on the nuclear side, and what we haven't yet seen is whether Iran is ready and willing to make a decision to do what it has to do. That's the test and we don't yet have an answer,' Blinken told ABC News' 'This Week With George Stephanopoulos' program.

Goldman Sachs Monday reiterated its bullish outlook for the demand recovery, saying that even with a potential restart of Iranian exports the case for higher oil prices remains intact, citing a vaccine-driven increase in global demand.

'Even aggressively assuming a restart in July, we estimate that Brent prices would still reach $80 per barrel in the fourth quarter, 2021, with our new base case for an October restart still supporting our $80 per barrel forecast for this summer,' said the bank in a note.