Goldman Sachs expects Brent crude to reach $65 a barrel in the third quarter of 2021, although it could end the year lower, at $58 a barrel, according to Goldman Sachs analysts.
In a note, they also said they expected West Texas Intermediate to rally to $55.88 a barrel by the third quarter of next year, up from $51.38 a barrel in earlier forecasts, Business Insider reports.
"There is a growing likelihood that vaccines will become widely available starting next spring, helping support global growth and oil demand, especially jet," the Goldman analysts said.
"Key to the resilience of spot prices, despite stalling inventory draws this summer, has been the steady rally in long-dated prices," they added.
Earlier this year, the investment bank's head of commodities Jeffrey Currie said that the short-term prospects of oil remained weak, but in 2021, prices would start to improve more markedly. He noted in July that if prices increased quickly, they would interfere with the market rebalancing by bringing more shale production back online.
Separately, Goldman analysts said back in July that demand for oil would likely recover to pre-crisis levels by 2022, spurred by a return to work for millions, a shift towards more private transport, and government support in the form of infrastructure spending.
In their latest note, the investment bank's analysts said they expected oil demand to improve by 3.7 million bpd between January and August next year, while supply remains capped thanks to OPEC+' continuing production cuts and a modest increase in non-OPEC supply.
Oil started this week with a gain, rising to the highest in five months on the back of positive economic news from China, a weak greenback, and plans by the UAE's state oil company to reduce crude oil supplies by as much as 30 percent in October.