The bank still expects Brent crude to reach $ 67.50 a barrel next quarter, due to strong restrictions in demand and supply from OPEC and its allies such as Russia, have Analysts announced, including Damien Courvalin, in a report dated February 12.
Goldman's estimate is about 7% higher than current price levels.
Brent is struggling to maintain its gains this month after its best start to the year, fearing that booming shale production will hurt OPEC and its partners' cuts, and fears that the trade war between US and China weaken demand. Investors worry too much, according to Goldman. The magnitude of the collapse in global growth forecasts is unjustified and the production losses in 2019 are already greater than expected, the bank said.
"OPEC's core producers are adopting a strategy of shock and fear, and exceeding their reduction commitment," analysts wrote. "The disturbances have increased with the risk that the decline in production in Venezuela accelerates following the introduction of additional sanctions in the United States in the Venezuelan oil sector. US producers are also moving towards limited growth in shale production so far. "
Brent, the benchmark for more than half of the world's oil, traded at $ 63.05 a barrel at 3:01 pm. in Singapore on Wednesday. Futures contracts jumped 15% in January, the highest this month since the end of the 1980s, after falling by 35% in the last quarter of 2018. Prices are still about 27% lower than last year. peak reached in four years reached in October.
A 24-nation alliance known as the OPEC + that formed two years ago has just begun a new round of production reduction measures designed to prevent an overabundance of oil and gas. offer. Prices climbed 3% in London on Tuesday, after OPEC data showed that cuts were already well underway and that Saudi Energy Minister Khalid Al-Falih announced on Wednesday. Financial Times that the kingdom would be even smaller. The highest official of the Organization of the Petroleum Exporting Countries urged members of the group to honor their commitments to reduce production.
The improvement in oil fundamentals is reflected in stocks, which are recording a higher decline than the season, said Goldman. This results in the regularization of Brent's futures structure – when short-term contracts are more expensive than those of later – is a sign of market strength, he said.
Goldman said that he remained "cautious" on the price outlook for the second half of 2019, as he expects a drop in marginal cost of production. Pipeline bottlenecks in the Permian shale basin could be mitigated, low-cost producers could sequentially increase production and delayed-cycle projects are likely to go online. "This should maintain a ceiling on deferred prices and reinforce our belief more and more of Brent's backlog," analysts wrote.
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