Goldman Sachs predicts that OPEC+ production cuts will provide near-term support for global oil prices, with Brent crude prices expected to remain stable. Recent data shows that crude production from Iraq, Kazakhstan, and Russia has declined by 0.5 million barrels per day, reflecting compliance with OPEC+ policies to curb supply.
Saudi Arabia, a key OPEC+ member, is anticipated to extend its oil production cuts beyond the initial timeline. Goldman Sachs now expects these cuts to last until April 2025, instead of the previously projected January 2025. The investment bank maintained its 2025 Brent crude price forecast at $76 per barrel, indicating confidence in market stabilization efforts.
The OPEC+ alliance, comprising OPEC members and allies like Russia, recently postponed a planned output hike from December to January. Ongoing discussions suggest further delays, emphasizing the group’s cautious approach. Goldman Sachs noted that any increase in production would be gradual and based on market data.
Despite efforts to manage supply, Brent crude futures have traded within a $70-$80 range this year and recently dropped below $74 per barrel. According to global commodity trading firms Vitol, Trafigura, and Gunvor, OPEC+ is unlikely to reverse its voluntary production cuts in the short term, ensuring continued market balance.
While geopolitical uncertainties and a potential oil deficit are projected for 2024, Goldman Sachs has revised its Brent crude average price for this year to $80 per barrel, reflecting an anticipated supply surplus in 2025. Rising compliance among OPEC+ members underscores their collective commitment to stabilizing oil prices.
This strategy aims to counter volatility, boost market confidence, and support a gradual recovery in global oil demand.
– Reported By PaisyWaala
