Oil production by members of the Organization of Petroleum Exporting Countries will rise this year and next, Goldman Sachs said, as there are worries that a meeting later this month between OPEC members and producers outside the organization, including Russia, will end in a deadlock.
The investment bank said it expects OPEC output to rise by 600,000 barrels per day in 2016 and 500,000 bpd in 2017, Business Times reported.
"While recent commentary calls into question the likelihood of a successful production freeze at a planned OPEC April 17 meeting, we have been less willing to believe in a sustained OPEC production freeze or cut, so we do not regard the data as a departure from our outlook at present," the bank said in a note to clients dated April 6.
As a result of this and also production data from the United States, Goldman said it was "somewhere between in line and modestly bearish for prices ... (and that) $35 per barrel WTI is not too high and not too low but just right."
Meanwhile, Iran has pledged to raise crude production capacity to its pre-sanctions level of 4 million bpd by March 2017. Iranian officials say they are open to discuss freezing output only after reaching their production target.
A senior Saudi official said last week the kingdom will not commit to the freeze plan unless Iran jumps on the bandwagon.
