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Goldman expects sanctions to keep aluminium prices high, sees oil hitting $72


(Reuters) - Aluminium prices are expected to remain high and volatile until June because of sanctions on Russia's Rusal, while tensions in the are likely to push prices to $72 a barrel, said on Thursday.

The reinforced its "overweight" view on commodities, with a forecast return of 10 percent over the next 12 months.

"With low cross-asset correlations, increasing inflationary risks, a positive carry and the potential for supply disruptions in the Middle East, the strategic case for owning commodities has rarely been stronger," analysts at the investment said in a note.

However, the does not expect direct impact on the global market from last week's U.S. sanctions directed at Russian oligarchs and companies. Among them are aluminium tycoon Oleg Deripaska, a close associate of

aluminium was on track for its biggest weekly gain on record after the imposed sanctions on Deripaska-owned UC Rusal, the world's second-biggest of the

Meanwhile, the potential reintroduction of sanctions on was unlikely to have an immediate impact on the market, Goldman said.

U.S. has given European signatories a May 12 deadline to "fix the terrible flaws" of a 2015 nuclear deal or he will refuse to extend U.S. sanctions relief on

"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," the said

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

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

"With low and declining inventories, the market remains vulnerable to even small disruptions."

prices edged lower on Friday after Trump tempered remarks warning of an imminent missile attack on but were still set for their biggest weekly gains in more than eight months.

(Reporting by and in Bengaluru; Editing by David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, April 13 2018. 11:50 IST