Goldman Sachs raised its Brent crude price forecasts on Thursday, saying oil markets have rebalanced six months sooner than expected, citing steady demand growth and continuing compliance with OPEC-led supply cuts, Reuters reports.
The bank’s three, six and twelve-month Brent oil price forecasts were raised to $75, $82.50 and $75 a barrel respectively, from $62 previously.
However, Goldman expects the price to dip again as U.S. shale producers pump more oil to benefit from the price reaction to lower global inventories.
“We expect that the shale response, OPEC’s eventual ramp-up and higher non-OPEC production will all bring prices lower sequentially, with our 2020 Brent forecast at $60,” it said.
The bank also raised its “2H18-2019” Brent-WTI differential to $5.50 a barrel, with risks of further widening this year.
Goldman sees a global oil market deficit of 0.2 million barrels per day (mb/d) in 2018, followed by a global surplus of 0.73 mb/d in 2019.
Oil prices pared early gains to stay little changed on Thursday as OPEC’s strong compliance with a supply reduction pact offset news that U.S. production topped 10 million barrels per day (bpd) for the first time in nearly half a century.