Oil production by members of the Organization of the Petroleum Exporting Countries (Opec) will rise this year and next, Goldman Sachs said, as the producers’ cartel is expected to fail to agree on a coordinated freeze or cut in output.
The investment bank said it expects Opec output to rise by 600,000 barrels per day (bpd) in 2016 and 500,000 bpd in 2017.
“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) US$35 per barrel WTI is not too high and not too low but just right.”
Front-month US West Texas Intermediate (WTI) was trading at US$38.12 at 0254 GMT on Thursday, while the international Brent crude benchmark was at US$40.11 per barrel.
Source: ReutersPrevious Next
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