• World
  • Columnist
  • Commodities
  • WORLD BUSINESS & ECONOMY
  • Executive Knowledge Series
  • Finance
  • Manufacturing
  • Markets
  • Risk & Governance
  • Small Business
  • Technology, Media & Innovation
  • Comments
  • Business AM WebTV
  • Login

Businessamlive
  • FRONTPAGE
  • FINANCE
    • AllAsset ManagementAuditBankingBondBudgetCapital MarketsC&I LeasingCurrencyDealDebt marketForexFund RaisingFundingGovernmentHedge FundsInsuranceInvestmentInvestorInvestor ServicesMergers & AcquistionsMoney marketTreasury BillsMortgagePensionsPersonal financePonziQuantitative EasingshareTaxationTSAWealth Management
      Finance

      Nigeria, Africa remittances on target as Wari, Lycaremit sign partnership

      January 21, 2021

      Companies

      Total Nigeria, Mixta, Valency, list new CPs on FMDQ platform to enhance financial markets development

      January 19, 2021

      Finance

      Amidst N32.22trn public debt, analysts say Nigeria’s external debt service manageable

      January 19, 2021

      Finance

      Stringent regulations, business environment forced Stanbic IBTC out of BDC business

      January 15, 2021

  • MARKETS
  • ECONOMY
    • AllAfricaAgricAirportsAmericaAsiaAustraliaBreakthroughDealEuropeForeign InvestmentsforexGlobal marketGovernanceIMFMiddle EastNECANigeriaOutlookRich listSouth AfricaSport BusinessTradeU.KWest AfricaWorld Economic forum
      Markets

      Nairobi Stock Exchange pushes expansion plans with more listings in 2021, says CEO

      24 hrs

      Africa Investment Forum

      Africa’s $60bn losses in illicit capital flows due to multinationals’ tax avoidance, says AfDB Adesina

      January 22, 2021

      Frontpage

      Covid-19 vaccine: Nigeria, 54 others to benefit from African Union’s 270m doses

      January 21, 2021

      Finance

      Nigeria, Africa remittances on target as Wari, Lycaremit sign partnership

      January 21, 2021

  • COMMODITIES
  • ENERGY
    • AllConferenceElectricityOil and GasPowerRenewable
      Companies

      Appeal Court suspends order against shutting of SEPLAT headoffice

      24 hrs

      Frontpage

      OPEC welcomes push for electric vehicles, but says fossil fuel remains strong

      January 21, 2021

      National: Governance, Policy & Politics

      Nigeria ramps up domestic LPG consumption above 1MMT, says PPPRA

      January 20, 2021

      Companies

      TIPP Oil, German lubricant maker, targets 2021 Nigeria launch with eco-friendly scheme  

      January 19, 2021

  • TECHNOLOGY
  • MANUFACTURING
  • ANALYSIS
    • Analyst Insight

      CBN meeting and NSE in focus

      January 18, 2021

      Analyst Insight

      Once again, fiscal stimulus takes centre stage

      January 18, 2021

      Analyst Insight

      Organisations must learn from the WhatsApp story  

      January 18, 2021

      Analyst Insight

      Data privacy maturity model in organisations

      January 11, 2021

Frontpage

Outlook for oil still bullish despite Saudi-Russia crude plan, says Goldman Sachs

Ayobami Adedinni

Ayobami Adedinni is  Businessamlive Reporter.
You can contact him on ayobami.adedinni@businessamlive.com with stories and commentary.

May 28, 2018872 views0 comments

Goldman Sachs Group Inc., leading global investment banking, securities, and investment management firm, has called bullish outlook for oil despite the recent dip in prices over OPEC and Russia planned production boost.

Analysts at Goldman Sachs, including Damien Courvalin in a May 25, 2018 report said the plan by Saudi Arabia and Russia to revive production after over a year of curbs signals supplies are currently tight, and it isn’t a bearish development.

Prices started falling after Saudi Arabia and Russia last week signaled they’ll restore some of the output they halted as part of an accord with 22 other nations. However, most producers weren’t consulted about the proposal to revive supplies.

Brent crude, the benchmark for more than half the world’s oil, slid 1.5 percent to $75.30 a barrel at 11:21 a.m. in London. Futures in London had risen above $80 a barrel earlier this month for the first time since November 2014. U.S. West Texas Intermediate was down 1.8 percent at $66.67 a barrel in New York, after climbing to as high as $72.83 on May 22.

Read Also:

  • Bullish insurance, industrial sectors see N50.3bn rise in Nigeria bourse…
  • Wheat soars as Russia considers export tax
  • Custodian Life earns ‘A’ rating with stable outlook from GCR
  • NNPC receives $120.49m crude oil receipt in September  

However, the bank’s analysts said even if the nations boost output by 1 million barrels a day, it would only offset involuntary production declines.

Lloyd Blankfein, the chairman and CEO of Goldman Sachs

A gradual implementation of a plan to boost output by 1 million barrels a day would still leave the market in deficit through the third quarter of 2018, according to Goldman, adding that ongoing disruptions in economically fragile OPEC member Venezuela and potential losses from fellow group member Iran because of renewed U.S. sanctions on the Islamic Republic are likely to partially offset this higher supply.

Goldman has been an oil bull since early last year, saying growing demand and output reductions by Organization of Petroleum Exporting Countries (OPEC) and its allies will help revive crude from the worst crash in a generation. Now, as prices retreat after surging to levels last seen in 2014, the bank is sticking to its optimistic stance and sees the current decline as temporary.

“The current level of the market deficit, the robustness of the demand backdrop, and the rising levels of disruptions all set the stage for inventories to fall further,” the analysts wrote in the May 25 report, which follows another earlier this month, when it admonished money managers who cut their bullish bets on oil.

The bank said the proposal for OPEC to lift output would require additional increases in production in 2019, which will further reduce already limited spare capacity next year.

Suhail Al Mazrouei, energy minister for the United Arab Emirates and current holder of OPEC’s rotating presidency, said the group as a whole will decide whether to adjust production. The countries are said to have concluded that the market re-balanced in April.

Goldman Sachs believes that the pace of demand growth would be sustained even if Brent crude is at $80 a barrel, and there are infrastructure problems that pose hurdles to bringing surging North American production to the market. It added that the global oil balance will need further increases in OPEC and Russian production in 2019, reiterating its $82.50-a-barrel Brent price forecast for the third quarter of 2018.

Goldman still sees “risks to prices in the second half of 2018-2019 as skewed to further upside.”, adding that “historically, prices have declined after the announcement of OPEC production increases, however, when these occurred in a strong demand environment like today, prices were on average 8 percent higher than pre-announcement two months later.”

Share on Facebook Tweet Email
TagsAyobami Adedinni Damien Courvalin Goldman Sachs Oil and Gas OPEC Saudi-Russia crude plan
PreviousFidelity Guarantee insurance for individuals
NextBeware OPEC member states! Use of fossil fuels threatened

Leave a comment

- Cancel reply

MARKET DATA

Market Videos

Recent Posts

  • Appeal Court suspends order against shutting of SEPLAT headoffice
  • Eko Atlantic City to utilise local content for economic diversification in Nigeria
  • Nairobi Stock Exchange pushes expansion plans with more listings in 2021, says CEO
  • Africa’s $60bn losses in illicit capital flows due to multinationals’ tax avoidance, says AfDB Adesina
  • Nigeria equities go bearish on selloffs in DangCem, AXA Mansard, UBA

World

Africa

Buhari, Okonjo-Iweala congratulate Adesina over reelection as AfDB President

Europe

EU businesses to cut investments in 2020, says EIB report

America

U.S. increases cost of visa application for Nigerians

Africa

Thatcher-Loving Nigeria Candidate Plans to Overhaul Economy

Africa

AfDB scales up industrialization pace on the continent, delivers improved business access to finance, skills, energy

Frontpage posts

0

China’s investment in Nigeria’s oil sector hits $16bn

Frontpage August 16, 2019

1
2

Artificial Intelligence to replace all human workers in near future, says expert

Frontpage December 17, 2017

3

$9.6bn: British firm to identify Nigeria assets for seizure

Frontpage August 26, 2019

4

World Bank: low income countries need $2.7t investment

Frontpage June 10, 2019

5

United Capital on verge of double series bond issuance

Companies May 11, 2020

SUPPORT

  • Photo Gallery
  • Help Centre
  • About Us
  • Accessibility

LEGAL & PRIVACY

  • Terms & Conditions
  • Privacy
  • Cookies
  • Copyright

SERVICES

  • Conferences & Events
  • Analysts Research
  • Advertising Rate
  • Ebooks

TOOLS

  • Portfolio
  • Newsletters
  • News feed
  • Currency Converter

SUBSCRIBE

Join us to get latest updates on business related news.

[mc4wp_form id="3076"]
  • ABOUT US
  • CONTACT US
  • CAREERS
  • TERMS & CONDITIONS
  • PRIVACY POLICY
Copyright 2017. All rights reserved. BusinessAMLive. A Businessnewscorp Member Company.