Goldman Lifts 2020 Oil Forecasts as OPEC Cuts Tighten Market

iraq oil

(Bloomberg) –Goldman Sachs raises 2020 Brent spot price to $63/bbl from $60 previously, according to emailed report. Long-term anchor price still seen at $55/bbl.

  • Bank now forecasts WTI spot price at $58.50/bbl with long-term anchor price at $50
    Goldman updates forecasts after OPEC+ agreed to bigger output cuts than expected
  • OPEC’s Oil Surprise Came as Skeptics Were Doubting Price Rise
  • Read: Why Bitcoin Mining Is Being Touted as a Solution to Gas Flaring
  • Bank sees shift in OPEC+ strategy to managing short-term physical imbalances rather than trying to correct perceived long-term imbalances through open-ended commitments
  • Forecasts that global oil supply/demand balances will be 0.3m b/d tighter than previously expected as a result
  • Read: Saudis Make Surprise Oil Cut With Eye on Aramco’s $2 Trillion
  • Still cannot rule out risk of poor compliance by Iraq, Nigeria and Russia
  • Still maintains 2020 U.S. shale production growth forecast at 600kb/d as poor financial performance, excess leverage and focus on emissions “sharply” pushes up cost of capital