Goldman Sachs stands by its prediction of lower oil prices
Goldman stated that the current rig counts, exploration and production levels in the US indicate no signs of a decline in supply. Also, the awaited expansion of production from Iran following the removal of sanctions and OPEC’s aggressive production are adding to the risk of storage constraints by next spring. However, Goldman Sachs analysts believe that production cuts would affect long-term revenues more than the current financial difficulties stemming from lower oil prices.
Previously, the US Energy Information Administration (EIA) reported on Wednesday that US crude oil inventories rose by 4.8 million barrels last week, defying analysts’ expectations that supplies would decline. On the other hand, the agency’s executive director Fatih Birol stated that current price levels will force oil production to decrease outside of the Middle East.
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