77439
Goldman Raises 2018 Crude Price Forecast
Goldman Raises 2018 Crude Price Forecast

Goldman Raises 2018 Crude Price Forecast

Goldman Raises 2018 Crude Price Forecast

A stronger than anticipated OPEC-led commitment to extend production cuts will support prices through 2018, according to analysts at Goldman Sachs.

In a research note published late Monday, Goldman lifted its Brent price forecast for next year to $62 a barrel and its WTI projection to $57.5 a barrel. The revisions were up from $58 a barrel and $55 a barrel respectively, CNBC reported.

While the OPEC-led deal “leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate,” Goldman analysts said in the research note.   

Oil prices have lost ground in the days following OPEC's deal with global producers last week. The 14-member body, Russia and nine other crude producers announced plans to extend their output cuts until the end of 2018.

The move was heavily telegraphed ahead of the decision, but oil producers had earlier indicated they could exit the deal if they feel the market was overheating.

"Of course, risks remain and we see these as skewed to the upside into 2018 on the risk of an over tightening, either because of new disruptions, demand exceeding our optimistic forecast of OPEC letting the stock draw run hot," Goldman analysts said.

However, Goldman said the response of shale oil and other producers to higher prices would likely incentivize OPEC and Russia to "pare back" their now greater capacity, thus leaving risks to prices skewed toward the downside over the long run.

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming US shale production. OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil group soon moved to curb production—along with other oil-producing nations—in late 2016.

Brent crude traded at around $62.36 on Tuesday morning, down 0.14%, while US crude was trading at $57.29, down 0.31%.

Cap: Oil prices have lost ground in the days following OPEC's deal with global producers last week.

Short URL : https://goo.gl/TnDj3P
  1. https://goo.gl/n1Kr7g
  • https://goo.gl/CdCfxW
  • https://goo.gl/mqMcqL
  • https://goo.gl/FYNDiS
  • https://goo.gl/NNSbNN

You can also read ...

India Co. Says ‘Important’ to  Buy Some Iranian Oil
Mangalore Refinery and Petrochemicals, a subsidiary of India’s...
NIOC Chief: US Talk to Zero Iran Oil Export Is Hot Air
Rhetoric from the United States that it wants to reduce Iran’s...
Iran's Marjan Petrochem Company Exports 1st Methanol Cargo
The first 20,000 ton methanol consignment produced by Marjan...
Crude Prices Rise
Oil prices rose for a fourth day on Wednesday after industry...
NOPEC Threat Prompts Change at OPEC
OPEC has urged its members not to mention oil prices when...
Russian Expert: Collaboration With Oil Majors Could  Help Iran Enhance Energy Output
Iran has proved that it has great potential for investment...
Foreign Firms to Invest in Mazandaran DGs Power Projects
Foreign companies have signed contracts to invest in small...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus