Oil Rises on Goldman Forecast

Oil prices rose on Friday, edging closer to new 17-month highs, after investment bank Goldman Sachs boosted its price forecast for 2017 and producers showed signs of adhering to a global deal to reduce output.

Brent futures rose $1.19, or 2.2%, to settle at $55.21 a barrel, while US West Texas Intermediate crude rose $1, or 2%, to settle at $51.90 per barrel, Reuters reported.

That put both contracts on track to rise for a fourth week in the last five, with Brent up around 23 % during that time and US crude up about 20%.

The prospect of lower production by OPEC and non-OPEC producers following a deal to cut supplies by nearly 1.8 million barrels a day led US bank Goldman Sachs to raise its oil price forecast.

Goldman upped its outlook for the second quarter of 2017 to $57.50 a barrel from $55 a barrel for WTI crude and raised its forecast for international benchmark Brent crude to $59 a barrel from $56.50 a barrel.

"We are up today because Goldman Sachs bumped up its oil estimates and the Russians said their oil companies would reduce output," said Phil Davis, managing partner of venture capital fund PSW Investments in Woodland Park, New Jersey.

The Organization of Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels per day from Jan. 1, its first such deal since 2008. Russia and other non-OPEC producers plan to cut about half as much.

Those deals, clinched over the past two weeks, have boosted expectations that a two-year supply overhang will clear soon and prices remain near highs last seen in July 2015.

Russia said on Friday that all of the country's oil companies, including top producer Rosneft, had agreed to reduce output. Other oil producers including Kuwait and Saudi Arabia have notified customers that they will cut from January.

"While the market will eventually need to see some evidence of an actual reduction in output, talk of production cuts and notices of lower allocations sent to refiners are sufficient to support market sentiment for now," Tim Evans, Citi Futures' energy futures specialist, said in a note.