Feb 22 Goldman Sachs expects global crude oil
inventories to keep falling due to production cuts and strong
growth in demand, although stocks are likely to rise in the
"We do not view the recent U.S. builds as derailing our
forecast for a gradual draw in inventories, with in fact the
rest of the world already showing signs of tightness," analysts
at the bank said in a note dated Feb. 21.
"Given our unchanged 1.5 million barrels per day growth
forecast for 2017, this higher base demand level should fully
offset higher U.S. output."
The Wall Street bank reiterated its forecast for Brent and
U.S. crude prices to rise to $59 and $57.50 per barrel
respectively in the second quarter, before dropping to $57 and
$55 for the rest of 2017.
Oil prices held near multi-week highs on Wednesday, with the
U.S. West Texas Intermediate April crude contract up 18
cents at $54.51 a barrel at 0228 GMT, while Brent crude
was up 24 cents at $56.90.
Surging U.S. output has pushed crude and gasoline
inventories to record highs, keeping a lid on prices after they
climbed following an agreement by the Organization of the
Petroleum Exporting Countries (OPEC) and other producers to cut
output by about 1.8 million barrels per day (bpd).
"While the production cuts have so far reached a
historically high level of compliance at 90 percent, the rebound
in U.S. drilling activity has exceeded even our above consensus
expectations," Goldman said.
However, the increase in U.S. drilling points to factors
including further improvement in shale productivity and funding
for the industry, rather than expectations of an increase in
prices, the bank said.
(Reporting by Arpan Varghese in Bengaluru; Editing by Joseph