Goldman Sachs is still bullish on oil and expects strong demand for which OPEC + should market an additional 2 million barrels per day (bpd) in the third quarter, following the approximately 2 million bpd the alliance and Saudi Arabia decided to return between May. and July.
“We forecast a bigger rebound in oil demand this summer than OPEC and IEA, requiring an additional 2MB / d in OPEC + production from July to October,” said Goldman Sachs, as quoted by CN thread
The investment bank expects surplus oil inventories to normalize in the fall of 2021.
Last week’s OPEC + deal to ease cuts “comes a month earlier than we expected,” said Goldman Sachs, noting that increases for June and July are smaller than analysts expected.
OPEC + decided on Thursday to gradually increase collective oil production by more than 1 million barrels per day over the next three months. The group will increase its production by 350,000 bpd in May and June and by more than 400,000 bpd in July. In addition, Saudi Arabia will also gradually reduce its additional one-sided cut of 1 million bpd over the next few months, starting with monthly production increases of 250,000 bpd in May and June.
Goldman Sachs remains bullish on oil demand despite recent demand concerns in Europe and India, which drove oil prices down 2 percent on Monday.
In early March, Goldman Sachs said it expected Brent Crude prices to hit $ 80 a barrel this year in the third quarter of this year, up $ 5 from the previous forecast released two weeks earlier.
Even after the oil sell-off in mid-March, Goldman said the “big breather” was a buying opportunity for oil and continued to forecast Brent would hit $ 80 a barrel in the summer.
By Tsvetana Paraskova for Oilprice.com
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