Goldman Sachs raises oil price forecast following OPEC deal

The deal OPEC + struck on Sunday is slightly bullish for Goldman Sachs’ forecast that Brent will hit $ 80 a barrel this summer, the investment bank said in a note after the group agreed to start trading. add production of 400,000 b / d each month from August.

For months, Goldman Sachs claimed $ 80 a barrel of oil this summer, expecting demand to pick up sharply, despite expectations that Iranian oil could legitimately return to the market at some point, and despite the ‘two-week standoff within OPEC + over how the group would handle oil supply management.

Last week, Goldman Sachs reiterated its $ 80 price forecast for Brent crude despite reports that Saudi Arabia and the United Arab Emirates (UAE) had reached an oil production deal that would extend the deal. OPEC + until the end of next year.

On Sunday, OPEC + agreed to extend the deal from April 2020 to the end of December 2022 and add 400,000 barrels per day (bpd) on a monthly basis from August 2021 and until phase-out. gradual increase from the 5.8 million bpd that the group currently retains. market, given improving global demand for oil. The group also gave higher benchmark production levels from May 2022 not only to the United Arab Emirates, but also to Saudi Arabia, Russia, Kuwait and Iraq.

“The agreement had two distinct axes: a moderate increase in production which will keep the market in deficit in the coming months, as well as forecasts for a higher capacity which will be necessary in the years to come given the underinvestment growing, ”Goldman Sachs said. said in a note, as reported by Reuters.

OPEC + deal is $ 2 a barrel up from Goldman’s $ 80 a barrel call for this summer, as well as a $ 5 hike from Brent’s forecast of $ 75 per barrel next year, the bank said.

By Tsvetana Paraskova for OilUSD

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