Sanctions to keep aluminium prices high, oil seen at $72 – Goldman Sachs

In its latest outlook report on commodities’ prices released Thursday, analysts at Goldman Sachs reinforced their “overweight” view on commodities, with a forecast return of 10 percent over the next 12 months, Reuters reports.

Key Points:

“With low cross-asset correlations, increasing inflationary risks, a positive carry and the potential for oil supply disruptions in the Middle East, the strategic case for owning commodities has rarely been stronger.

London aluminum was on track for its biggest weekly gain on record after the United States imposed sanctions on Deripaska-owned UC Rusal, the world’s second-biggest producer of the metal.

Meanwhile, the potential reintroduction of sanctions on Iran was unlikely to have an immediate impact on the oil market,

Without the support of other countries, it appears unlikely that production would fall much, and we expect that several hundred thousand barrels of Iranian exports would be initially at risk.

Potential losses from Iranian production were likely to support oil prices by $7 a barrel, it added.

However, geopolitical threats have also continued to escalate for oil, in Yemen, Syria and Iran, driving a large part of the $5 per barrel rise in oil prices over the past week.”