5 Stock Market Forecasts Next 6 Months

2. Oil Prices will Hike, and Oil Companies will Outperform

Oil prices are expected to power through the $ 80-a-barrel level in the year’s second half. After a recent slide lower, the increase comes on price struggling to find support below the $70 a barrel level. According to analysts at Goldman Sachs, one of the factors expected to push prices higher is reduced production in the US.

The analysts at Goldman Sachs expect deficits of almost 2 million barrels per day in the third quarter. With demand reaching an all-time high, prices are expected to rise amid low supply. Demand from major importing nations is expected to support higher prices. Chin and Indian oil demand is expected to rise by 2 million barrels a day in the second half.

Goldman Sachs expects oil prices to end the year at highs of $86 a barrel level as rig count continues to drop and hit the lowest level since March of last year.

Saudi Arabia, one of the major oil producers cutting supply in the oil market, should also put pressure on oil prices amid high demand, consequently pushing prices higher. According to Giovanni Staunovo of UBS Global Wealth Management, Russian oil exports falling considerably should also fuel higher oil prices.

“Russian exports falling considerably. So, we have a massive amount of oil being removed from the market, which is tightening up fundamentals and pushing up prices. We expected a further increase to between $85 and $90 over the coming months,” stated Staunovo on CNBC.