<a href="https://www.thenationalnews.com/business/energy/2023/07/30/oil-posts-fifth-weekly-gain-amid-tightening-crude-market/" target="_blank">Oil prices </a>rose on Monday and were headed for their biggest monthly gain in over a year amid a tightening crude market. Brent, the benchmark for two thirds of the world’s oil, was trading 0.67 per cent higher at $85.56 a barrel at 8.15pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, was up 1.29 per cent at $81.62 per barrel. On Friday, Brent settled 0.89 per cent higher at $84.99 a barrel while WTI was up 0.61 per cent at $80.58. <a href="https://www.thenationalnews.com/business/energy/2023/07/21/oil-at-100-unlikely-this-year-as-deeper-opec-cuts-not-expected-goldman-sachs-says/" target="_blank">Falling crude stocks</a>, tightening supply and easing concerns about aggressive interest rate increases have supported crude futures in recent weeks, with Brent up by about $9 from a month ago. “Record high demand and Saudi supply cuts have brought back deficits, and as the market has abandoned its growth pessimism,” Goldman Sachs said in a research note on Sunday. The investment bank reaffirmed its Brent forecast of $86 a barrel by December and expects prices to <a href="https://www.thenationalnews.com/business/energy/2023/07/27/oil-prices-rise-amid-drop-in-us-crude-stocks-and-fed-rate-increase/" target="_blank">rise to $93 in the second quarter</a> of 2024. Goldman Sachs raised its 2023 oil demand estimate by 550,000 barrels a day, and said that crude consumption reached a record high of 102.8 million bpd this month. “This upgrade mostly reflects firm high-frequency oil demand and gross domestic product estimates in India and the US,” the bank said. The US GDP in the second quarter <a href="https://www.thenationalnews.com/business/economy/2023/07/28/us-economy-growth-interest-rate/" target="_blank">expanded by 2.4 per cent</a>, up from 2 per cent in the first quarter and higher than the market consensus of 1.6 per cent, the country's Commerce Department said last week. Goldman Sachs also said it expects Saudi Arabia’s extra voluntary output cut of 1 million bpd to last through September before being halved from October. The bank has forecast a larger crude deficit of 1.8 million bpd for the second half of 2023 amid “firmer” demand. It is expected to narrow to 600,000 bpd next year. “A significant rise in Opec spare capacity over the past year, the return to growth in international offshore projects, and declining US oil production costs limit the upside to prices,” Goldman Sachs said. “Bearish risks include beats in sanctioned supply from Iran and Venezuela, or persistently higher than expected stocks.” Earlier this month, Saudi Arabia, the world's largest oil exporter, said it would extend its<a href="https://www.thenationalnews.com/business/energy/2023/07/13/opec-boosts-2023-oil-demand-forecast-amid-surging-chinese-demand/" target="_blank"> voluntary output cut</a> of 1 million bpd until August. Russia has also announced an additional output reduction of 500,000 bpd for next month. On June 4, Opec+ agreed to keep its current output policy in place until the end of 2024. The group has total production curbs in place of 3.66 million bpd, or about 3.7 per cent of global demand, including a 2 million bpd reduction agreed on last year and voluntary cuts of 1.66 million bpd announced in April. Last week, the International Monetary Fund marginally raised its forecast for the global economy for this year and the next, but said it was “not out of the woods” due to headwinds that persist, even though the recovery is on track. The IMF has revised its earlier forecast for this year upwards, raising it by 0.2 percentage points to 3 per cent, although lower than the 3.5 per cent expansion recorded in 2022. It is projecting a similar pace of growth in 2024.