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Essam Al-Sudani | Reuters
Men work for the Iraqi Drilling Company on the Rumaila oil field in Basra, Iraq.
Brent crude could reach $ 75 a barrel in the coming months, but the return of the "new oil order" will soon lower prices, said Goldman Sachs Monday.
Goldman based his earlier forecast on a fundamental reading of supply and demand in the oil market. But the investment bank said crude prices had benefited from technical assistance after reaching their highest level in three months, and a number of bullish factors should boost commodity prices in March and April.
"While prices could easily trade in the range of $ 70 to $ 75 / barrel, we believe that such an environment could deteriorate," said Jeffrey Currie, global head of research on commodities, and Damien Courvalin, chief strategist in this field.
"As a result, we would perceive short-term strength as a window of opportunity for producers who wish to sell their futures prices to ensure the security of their earnings before the return of the new oil order later this year" , wrote the analysts in a research note.
The new order is marked by increased US oil production from the country's oil shale deposits and increased low-cost production by OPEC and its allies, including Russia. This will eventually keep Brent and US crude on Goldman's $ 60- $ 55 year-end targets, respectively, analysts said.
But in the short term, the so-called OPEC + alliance takes a "shock and fear" approach to reduce production, says Goldman. Saudi Arabia is leading this rapid retreat, with pumping projects of 500,000 barrels per day below its quota in March. Meanwhile, Russia has indicated that it will intensify the cuts over the next two months.
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