- Goldman Sachs (NYSE:GS) cuts its oil price forecasts for 2019, citing rising global production and surprisingly resilient U.S. shale growth, even as crude continues to move away from December’s 18-month lows; February WTI settled +1.2% at $48.52/bbl.
- Goldman now expects the Brent benchmark to average $62.50/bbl this year, down from a previous forecast of $70, while seeing WTI averaging $55.50/bbl in 2019, down from a prior estimate of $64.50.
- "We expect that the oil market will balance at a lower marginal cost in 2019 given higher inventory levels to start the year, the persistent beat in 2018 shale production growth amidst little observed cost inflation, weaker than previously expected demand growth expectations (even at our above consensus forecasts) and increased low-cost production capacity," the firm writes.
- Nevertheless, Goldman slightly raises its stock price targets for BP, which the firm says is "on the cusp of delivering one of the industry’s strongest pipelines of new oil and gas projects," and Royal Dutch Shell (LON:RDSa) (RDS.A, RDS.B), which "offers the strongest cash returns to shareholders, on our estimates. (Source: Bloomberg First Word)
- ETFs: USO, OIL, UWT, UCO, DWT, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM, WTIU, OILK, OILX, WTID, USOI, USOU, USOD, OILD, OILU, USAI
- Now read: Energy Recap: Quick Hits - Energy News For The Week Ended Jan. 4, 2019
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