Goldman Sachs has downgraded its forecast for oil prices over the next quarter amid a sudden uptick in shale drilling and an unexpected surge in production from Libya and Nigeria.
The investment bank now points to a three-month average of $47.50 per barrel for WTI crude, down from its previous estimate of $55.00 a barrel.
“The fast ramp-up in shale drilling and the unexpectedly large rebound in Libya/Nigeria production are on track to slow the 2017 stock draws,” Goldman Sachs analysts said in a research note published late Wednesday.
The rebound in production from Libya and Nigeria – two countries which were exempt from OPEC’s historic November deal to curb output – could offset inventory declines in the third quarter of this year, Goldman Sachs analysts warned.
“This creates risks that the normalization in inventories will not be achieved by the time the OPEC cut ends next March. We expect this will leave prices trading near $45 (a barrel) until there is evidence of a decline in the U.S. horizontal oil rig count, sustained stock draws or additional OPEC production cuts,” the analysts said in the note.
via CNBC
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Alfonso Esparza