Goldman Sachs sees ‘upside’ to oil price forcasts after OPEC+ deal

Oil Price, Goldman, Goldman Sachs

 By: Reuters – U.S. investment bank Goldman Sachs said the OPEC+ deal to boost oil supply supports its view on oil prices and expects modest “upside” to its summer forecast for Brent to reach $80 a barrel.

OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, agreed on Sunday to boost oil supply from August to cool prices which have climbed to 2-1/2 year highs. read more

“The agreement had two distinct points of focus: a moderate increase in production which will keep the market in deficit in the coming months, as well as guidance for higher capacity which will be needed in coming years given growing under-investment,” Goldman Sachs said in a note.

Goldman said the deal is in line with its view that “OPEC should focus on maintaining a tight physical market all the while guiding for higher future capacity and disincentivizing competing investments.”

The OPEC+ deal represents $2 per barrel “upside” to its $80 per barrel summer Brent price forecast and a $5 upside to its $75 per barrel forecast for next year, Goldman said.

However, Goldman expects oil prices to gyrate in the coming weeks as the U.S. continues to deal with surges from the Delta variant and the slower velocity of supply developments relative to recent mobility gains.

With most of its expected summer demand gains already achieved and with growing headwinds from the Delta COVID-19 variant, Goldman said the catalyst for the next leg higher in prices is shifting from the demand to the supply side, with upside risks to price forecasts in the coming months.

Oil prices fell more than $1 a barrel on Monday, after the OPEC+ group of producers overcame internal divisions and agreed to boost output, sparking concerns over a supply glut amid a surge in COVID-19 cases.

The crossroads of energy information for minerals owners in Oklahoma. Where you can: See recent prices of mineral and lease transactions. Receive an offer to lease or buy your minerals.

Find relevant news stories on the most active areas, including the Scoop and Stack Plays.

Data Powered by Oseberg

Today’s E&P world is rapidly shifting towards data-driven decision making, but those decisions are only as good as the data behind them. Access Oseberg's deep, accurate, and detailed pool of insight-rich industry data with our powerful analytical and search tools and get the clearest picture of what's happening as soon as it happens.


This web site is maintained solely for the personal use of our visitors. Although we at Oklahoma Minerals have made all reasonable efforts to provide accurate information, we cannot guarantee the completeness, timeliness or accuracy of the information contained herein. Nothing in this web site contains investment advice. Any decisions based upon the information contained in this web site are the sole responsibility of the user.

Copyright © 2021

To Top
Natural Gas Futures 'Reinvigorated' by Weekend Cold Shift as Prices Soar EarlyRead More