American investment bank Goldman Sachs has said that the price of oil per barrel will get near $60 early next year.
In the second reappraisal of its 2017 forecasts in as many weeks, the oil price analysts increased its expectations for global oil prices at the start of 2017.
Earlier in the year, the bank made a prediction that oil prices could fall as low as $20 per barrel as a massive oversupply of oil caused untold damage to the market, and it was almost right when oil prices fell far below the $30 mark back in February.
Since then, however, the Organisation of Petroleum Exporting Companies (OPEC), along with a number of nonmember oil-producing countries, has agreed on a deal to cut oil output by nearly 1.8 million barrels per day starting in January. This is the main factor in Goldman Sachs’ much more optimistic forecast.
When the deal was reached, Goldman Sachs first said that the deal would reach 55% compliance, which would be equal to a million barrels per day, resulting in an oil price of $55. However, it has since revised this forecast, amidst signs that OPEC members are already engaging in activities to cut production in January, with countries like the United Arab Emirates, Kuwait and Saudi Arabia already notifying customers of a supply cut starting next month, according to Reuters.
If oil prices do reach $60, it will be good news for the likes of Shell, Mobil and Fuchs, which makes Fuchs WSP 783-L, as they will be able to get more for their oil supplies.