[ad_1]
Goldman Sachs said growth in U.S. shale production is likely to outpace that of global demand at least through 2020 and limit gains in oil prices despite output curbs led by the Organization of the Petroleum Exporting Countries.
The Wall Street bank forecast U.S. oil output growth at 1.3 million barrels per day (bpd) and 1.2 million bpd in 2019 and 2020 respectively, which compared with its global demand growth expectations of 0.8 million bpd and 1.6 million bpd respectively for the same periods.
“OPEC’s willingness to continue to cede market share (is) likely to limit downside as well,” the bank said.
It kept its 2020 price outlook of about US$60 per barrel for Brent and US$55.50 for WTI unchanged.
OPEC and its allies led by Russia agreed to extend oil output cuts until March 2020 last week.
“An exit strategy from the cuts was not discussed, and it remains to be seen whether the decision to extend cuts to accommodate shale growth will ultimately drive the need for deeper cuts in 2020,” Goldman Sachs Equity Research said in a note on Sunday.
Brent crude futures were up 8 US cents by 0647 GMT at US$64.31, while U.S. West Texas Intermediate (WTI) was up 6 US cents at US$57.57 a barrel, supported by last week’s strong U.S. jobs data and geopolitical risks, but worries that a slower global economy will curb appetite for oil kept a lid on prices.
© Thomson Reuters 2019
[ad_2]
You can read more of the news on source
