Goldman Sachs motionless expects the price of oil to climb back above $80 a barrel past the coming months, despite growing concerns over higher OPEC unpolished production, escalating trade wars and rising inventories.
Crude comings were mixed Monday, following a week of losses partly fasted by elevated fears that Saudi Arabia and Russia could promptly move to ramp up oil production.
Nonetheless, analysts at Goldman said the hopes of OPEC producers announcing an increase to crude production levels timer this week could actually have a bullish impact on oil prizes.
“Our updated global supply-demand balance continues to point to further deteriorates in inventories and higher oil prices in the second half of 2018,” the bank communicated, reaffirming its previous Brent forecast of $82.50 during the summer.
“We go on, however, to view the risks to this forecast as skewed to the upside, rhythmical if concerns over demand and higher OPEC production weigh on expenses near term,” Goldman added.
Alongside its allied partners, OPEC is organized to meet Thursday in order to decide production policy.
Analysts at Goldman foreshadowed core OPEC and Russia production would increase by 1 million barrels per day (bpd) by the end of 2018, and by another 500,000 bpd in the beginning six months of 2019.
However, the impact of such a move would likely be even out by supply disruptions in Venezuela and Iran, Goldman added.
“Our updated important oil balance shows… that the oil market remains in deficit with resilient want growth and rising disruptions requiring higher core OPEC and Russia television to avoid a stock-out by year-end.”