(Bloomberg) -- Oil may surge to $90 a barrel if the approaching winter in the northern hemisphere proves colder than normal, said Jeff Currie, global head of commodities research at Goldman Sachs Group Inc (NYSE:GS).
Such a rise would be $10 higher than the bank’s current forecast and would be accompanied by a prolonged period of high natural gas prices that already have had disastrous consequences for U.K. power providers.
Tightening gas supplies in Europe will elevate demand for oil as an alternative at a time when global crude output is constrained, Currie said during a Bloomberg Television interview on Wednesday. Post-hurricane disruptions in the U.S. Gulf of Mexico were among the worldwide factors he cited.
Meanwhile, the gas rally shows no signs of abating, “particularly outside the U.S.” as tight supplies run headlong into surging demand, Currie said.
“Supply chains are so severely depleted that the system can not accommodate any type of disruption,” Currie said.
Benchmark international oil futures rose 1.4% to $75.39 at 4:09 p.m. in London, extending the year-to-date advance to 46%.
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