Goldman Sachs: OPEC, Allies Will Achieve Their Goal by April
OPEC and its allies will probably achieve their goal of draining oversupply from the oil market and boosting prices by next month, says Jeff Currie, global head of commodities research at Goldman Sachs.
The 14-nation producer group and its allies led by Russia set out to balance the market after oil prices plunged more than 40% at the end of last year. To do that, they aim to keep 1.2 million barrels per day off the market in the first six months of the year, CNBC reported.
"OPEC is pursuing a shock and awe strategy" by slashing output at the start of their production-cutting deal, Currie said on Monday.
He noted that OPEC is throttling back output faster than Goldman expected, while Venezuelan supply continues to tank and Russia says it will accelerate its production cuts.
"This market is likely to be rebalanced by April," he told CNBC.
That will force OPEC to lay out its plans for lifting the production curbs by May or June, he said. Currie believes that by telegraphing its exit strategy, OPEC can dissuade US drillers from turning on the taps, thereby preventing another price-crushing oil glut.
However, OPEC's "shock and awe" policy, combined with robust oil demand, could easily push Brent crude oil back to $70 to $75 a barrel in the near term, up from current prices in the mid-$60 range, Goldman forecast last week.
Saudi Energy Minister Khalid al-Falih recently told CNBC he is leaning towards extending the six-month deal into the second half of 2019.
source: Financial Tribune
Top News
Glencore in talks to sell Philippine copper smelting unit
Rasul Khalife Soltani, Secretary of the Iranian Steel Producers Association on the sidelines of the 1403 Steel Symposium:
Mobarakeh steel is producing green steel through scrap recycling
India’s record gold import said to be due to calculation error
Volkswagen buys 9.9% of Patriot Battery Metals for $48 million
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Norge Mining acquires Europe’s largest natural graphite producer
Mercuria partners with Zambia on metals trading venture
Aluminum price falls to one-month low in wider commodity slump
Skeena advances Eskay Creek permitting, unlocks Orion funding
Tiny but vital metal markets rush to adjust to Chinese clampdown
Petra Diamonds cuts forecasts, jobs amid market weakness
El Salvador president proposes bill to overturn metals mining ban
China’s 2025 steel demand to fall 1.5% on year, state research institute says
Lure of Anglo’s copper mines could test BHP’s spending resolve
Copper giant Peru foresees another production plateau in 2025
Iron ore price weakens as Australia flags return to sub-$100 prices
Nickel price hits 4-year low as gloom offsets potential Indonesia cuts
Mercuria partners with Zambia on metals trading venture
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Tiny but vital metal markets rush to adjust to Chinese clampdown
Petra Diamonds cuts forecasts, jobs amid market weakness
El Salvador president proposes bill to overturn metals mining ban
China’s 2025 steel demand to fall 1.5% on year, state research institute says
Lure of Anglo’s copper mines could test BHP’s spending resolve
Iron ore price weakens as Australia flags return to sub-$100 prices
Nickel price hits 4-year low as gloom offsets potential Indonesia cuts
Sibanye raises $500m via metals streaming deal with Franco-Nevada
Triple Flag to acquire royalty on Tres Quebradas lithium project