Goldman Sachs raises oil price forecast for next year
Baku, December 6, AZERTAC
Goldman Sachs has raised its crude oil price forecasts for 2018, citing lower inventories next year and the strong commitment shown by Russia and Saudi Arabia last week to extend output cuts at the Opec-led meeting in Vienna, according to the National.
The bank in a note published late on Monday raised its Brent price forecast for next year to US$62 a barrel and its WTI forecast to $57.50 a barrel. The revisions also reflect higher US pipeline tariffs and a wider WTI-Brent differential of $4.50 a barrel, the bank said.
"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," analysts at the bank said in the note.
Oil prices, which have come off highs hit following the deal between Opec and other crude producers to extend their output curbs, are being supported by expectations of a drop in US crude stockpiles.
"Of course, risks remain and we see these as skewed to the upside into 2018 on the risk of an overtightening, either because of new disruptions, demand exceeding our optimistic forecast or Opec letting the stock draw run hot," Goldman said.
The bank, however, said it believes the response of shale oil and other producers to higher prices will encourage OPEC and Russia to pare back their now greater spare capacity, leaving long-term risks to prices skewed to the downside.
Other news in this section
