Goldman Sachs lifts crude price forecast after OPEC+ output cut

Oil pumps

Oil analysts at Goldman Sachs raised their fourth-quarter estimate for Brent prices by $10 to $110 a barrel following OPEC+’s latest decision to cut oil production by two million barrels per day (bpd).

“All the developments we have seen on the supply side at this point very much sets the stage for what we believe will be higher prices into the end of this year,” Damien Courvalin, head of energy research at Goldman Sachs, told Bloomberg TV.

Meanwhile, UBS analysts said, in a research note, that the oil market is expected to tighten further, expecting Brent to advance above $100 in the coming quarters.

They cited factors putting combined pressure and squeezing the oil market, including an OPEC+ production cut, the European ban on Russian crude imports, the likely end of the Organization for Economic Co-operation and Development’s (OECD) release of strategic oil reserves and higher demand from gas-to-oil switching this winter.

This came after OPEC+ decided, during its meeting in Vienna on Oct. 5, to reduce oil production by two million bpd as of next November.