- Goldman Sachs (NYSE:GS) slashes its three-month price forecast for WTI crude oil by 15% to $47.50/bbl from $55, as production gains in Libya and Nigeria are jeopardizing OPEC’s efforts to reduce global inventories and may force the cartel to cut even deeper to prop oil prices.
- Unexpected rebounds in those countries, which were exempted from OPEC’s November deal to curb production, could offset inventory declines expected in Q3, Goldman says.
- “This threatens to close the window of time for stocks to normalize before OPEC cuts end and raises the concerns that OPEC will then ramp up production to defend market share,” according to Goldman.
- Goldman believes accelerating stockpile declines will require deeper cuts in the short term and a clear signal that OPEC will increase production in 2018.
- ETFs: USO, OIL, UWT, UCO, DWT, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM, OILK, WTIU, OILX, WTID, USOI
- Now read: Forget Draghi, Crude Matters
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