The investment bank is now growing even more bullish, predicting that the oil market has likely balanced, and that Brent Crude will reach $82.50 a barrel within six months.
Goldman sees the price of Brent reaching $75 per barrel within three months, lifting its short-term oil price projection from the previous $62 forecast.
“The rebalancing of the oil market has likely been achieved, six months sooner than we had expected,” the bank’s analysts said in a report, as carried by Bloomberg.
“The decline in excess inventories was fast-forwarded in late 2017 by stellar demand growth, high OPEC compliance, heavy maintenance as well as collapsing Venezuela production,”Goldman noted.
At the end of last year, Goldman Sachs was more optimistic about the speed of the oil market rebalancing than many experts and other banks, and OPEC itself. The investment bank expected that the global oil overhang will have cleared by the middle of 2018, accelerating OPEC’s exit from the production cut pact that is currently set to expire at the end of 2018.