After an earlier prediction that oil price would average $62 par barrel for 2018, Goldman Sachs, a global investment bank, has revised upwards, in short, medium and long-term scenario, the price of the energy commodity to $75, $82.50 and $72 respectively.
In a revised forecast note released on Thursday, analysts at the banking giant, said the global oil markets have rebalanced faster than expected by six months. It cited a steady growth in demand, as well as the continuing compliance with a supply cuts instituted by the Organisation of Petroleum Exporting Countries (OPEC) as reasons for its positive price expectation for the commodity.
But the bank, well-regarded for its oil market price calls, said its price would dip again when shale oil producers in the United States pump more oil to benefit from the price reaction to lower global inventories, the news agency, Reuters also reports.
“We expect that the shale response, OPEC’s eventual ramp-up and higher non-OPEC production will all bring prices lower sequentially, with our 2020 Brent forecast at $60,” Goldman Sachs said in a note.
The bank also raised its “2H18-2019” Brent-WTI differential to $5.50 a barrel, with risks of further widening this year.
Goldman sees a global oil market deficit of 0.2 million barrels per day (mb/d) in 2018, followed by a global surplus of 0.73 mb/d in 2019.
Oil prices pared early gains to stay little changed on Thursday as OPEC’s strong compliance with a supply reduction pact offset news that U.S. production topped 10 million barrels per day (bpd) for the first time in nearly half a century.
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