FX.co ★ Oil Price Forecast After OPEC+ Production Cuts

A few hours after OPEC+ announced it would cut total oil production by more than 1 million barrels per day, Goldman Sachs revised and published its forecast for oil prices, raising it by the end of 2023 for Brent crude from $90 to $95.

The bank also raised its forecast for Brent by the end of 2024 from $97 to $100.

Goldman Sachs said in March that if OPEC meets its production targets, oil prices could rise to $107 a barrel. At the time, Brent was trading around $80 a barrel.

In the same March statement, Goldman analysts predicted that rising demand from China and a slow increase in non-OPEC production could prompt the cartel to rethink its targets.

Nevertheless, even in this scenario, Goldman analysts noted that oil prices will rise in the second half of the year. And according to this scenario, 1 million barrels per day were added to global supplies.

At the end of March, when oil prices were still low, Goldman recommended buying oil on the fall, thus confirming its bullish forecast.

OPEC+ unexpectedly announced a 1.16 million bpd production cut, with Saudi Arabia accounting for the lion's share, at 500,000 bpd.

Riyadh was irritated by the Biden administration's decision to delay the start of oil purchases for the SPR.