Goldman Sachs sees lower oil inventories, higher prices in H2 2018

US bank Goldman Sachs said that the updated global supply-demand balance continues to point to further declines in inventories and higher oil prices in H2 2018, reiterating its Brent price forecast for a peak of $82.50 per barrel during the summer and a year-end estimate of $75.

Demand is expected to grow above average by 1.75 million bpd in 2018, the forecast said.

Core OPEC and Russia production is expected to increase by 1 million barrels per day by year-end and by another half a million barrels per day in the first half of 2019, but would be offset by increased disruptions in Venezuela and Iran, the bank said.

The increase in OPEC and Russian oil output is expected to stand at 0.3 million bpd this year and at 0.1 million bpd in 2019, it added.

The Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia, and some allies including Russia have been withholding output since the start of 2017.

They will meet in Vienna on June 22 to decide forward production policy, with Russia and Saudi Arabia pushing for higher output.