Goldman Sachs is still bullish on oil and anticipates strong demand that would force OPEC + to put an additional 2 million barrels per day (bpd) on the market in the third quarter, after the roughly 2 million bpd that the alliance and the Saudi Arabia decided to return between May and July.
“We forecast a larger rebound in demand for oil this summer than OPEC and the IEA, requiring an additional 2 mb / d in OPEC + production from July to October,” Goldman Sachs said, Quoted by CN wire.
The investment bank expects excess oil stocks to normalize by fall 2021.
Last week’s OPEC + deal to ease the cuts “comes a month ahead of schedule,” Goldman Sachs said, noting that the increases for June and July are lower than its analysts had expected.
OPEC + decided on Thursday to gradually increase collective oil production by more than 1 million bpd 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 is also gradually easing its further unilateral reduction of 1 million b / d over the coming months, starting with monthly production increases of 250,000 b / d in May and June.
Goldman Sachs continues to have a bullish outlook on oil demand, despite recent concerns over demand in Europe and India, which pushed oil prices down 2% early Monday.
In early March, Goldman Sachs said it expected Brent Crude prices will reach $ 80 per barrel in the third quarter of this year, up $ 5 from a previous forecast issued two weeks earlier.
Even after the massive oil sale in mid-March, Goldman said the “big breather” was a buying opportunity for oil and continued to forecast Brent to hit $ 80 a barrel over the summer.
By Tsvetana Paraskova for OilUSD
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