Goldman Sachs says OPEC+ unlikely to raise oil production at June meeting

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Goldman Sachs said they no longer expect OPEC+ to announce a partial unwind of voluntary production cuts in June.

The bank said inventories have recently surprised to the upside, and as a result, their model now estimates only a 37 per cent chance of a production increase decision in June.

“While our interpretation of OPEC+ communication is that no final decision has been made, we now expect Saudi crude supply to remain flat at 9 mb/d (million barrels per day) in July (vs. 9.2 previously)” the Wall Street bank added.

Oil price prediction

Goldman still expects Brent crude futures to remain in a range of $75 to $90 a barrel in most scenarios and forecasts they will average $82 in 2025, it said in a note.

Russian Deputy Prime Minister Alexander Novak said on Tuesday that there had been no discussions about an oil output increase by OPEC+.

OPEC transitions to ‘call on OPEC+

The oil producing group of nations announced last week that it will stop publishing a calculation of the world’s demand for its crude in its monthly oil report, two sources close to the matter said, focusing instead on forecasts for demand for oil from the wider OPEC+ group.

The change reflects what has become long-standing cooperation between the members of the Organization of the Petroleum Exporting Countries (OPEC) and the wider grouping on taking collective oil supply decisions.

OPEC’s Vienna secretariat has in its monthly reports published an estimate of the demand for OPEC crude, also known as the ‘call on OPEC’. The number is watched by analysts and traders as an indicator of oil market strength.

But from this month OPEC will give only the estimate of demand for crude from the Declaration of Cooperation (DoC) countries, the sources said. The DoC is the formal name for OPEC+, which comprises the 12 OPEC members and 10 non-members of which Russia is the largest producer.

Demand for crude from the wider group is now more relevant, one of the sources said, because the DoC nowadays is the framework for cooperation on the oil market. Both sources declined to be identified by name.

Read: OPEC switches to ‘call on OPEC+’ in global oil demand outlook