Goldman Sachs has announced oil prices will rise to under $60 US in the first half of the year thanks to reduced supply that would move the market into a deficit and draw down current large oversupply.
Brent prices will also peak at $59 US per barrel over the next six months with implemented cuts that will push the oil market into a deficit.
The deficit, according to Goldman Sachs, will move the market into backwardation by the summer season.
Brent prices are seen peaking at US$59 per barrel in the first half with the cuts implemented. The cuts would also push the oil market to a deficit in the first quarter, Goldman says, expressing a more optimistic view on the drawdown of oversupply than OPEC, which expects the market to rebalance in the second half, than the International Energy Agency (IEA) which sees the cuts likely moving the market into deficit in the first half by an estimated 600,000 bpd.
In Goldman’s view, the deficit in the first quarter would move the market into backwardation by the summer.