Goldman raises 2018 oil price forecast

access_time2017-12-06 09:15:54


 

A stronger than anticipated OPEC -led commitment to extend production cuts will support prices through 2018, according to analysts at Goldman Sachs .

In a research note published late Monday, Goldman lifted its Brent price forecast for next year to $62 a barrel and its WTI projection to $57.50 a barrel. The revisions were up from $58 a barrel and $55 a barrel respectively.

While the OPEC-led deal "leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate," Goldman analysts said in the research note.

Oil prices have lost ground in the days following OPEC's deal with global producers  last week. The 14-member cartel, Russia and nine other crude producers announced plans to extend their output cuts until the end of 2018.

The price of oil collapsed from near $120 a barrel in June 2014  due to weak demand, a strong dollar and booming U.S. shale production. OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil cartel soon moved to curb production — along with other oil-producing nations — in late 2016.

Brent crude traded at around $62.36 on Tuesday morning, down 0.14 percent, while U.S. crude was trading at $57.29, down 0.31 percent.

CNBC




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