Goldman Says $90 Oil May Push OPEC+ Into Faster Output Ramp-Up - Bloomberg

Goldman Says $90 Oil May Push OPEC+ Into Faster Output Ramp-Up - Bloomberg

With Brent oil prices having surged to around $90 per barrel, OPEC and its allies may announce a bigger-than-expected rise in output, according to Goldman Sachs Group Inc.

The outcome of Wednesday’s meeting remains “evenly balanced” between a hike of 400,000 barrels a day for March and a bigger increase, the Wall Street bank said.

“We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations,” analysts including Damien Courvalin, Callum Bruce and Jeffrey Currie wrote in a report. “The producers’ group may also be growing more concerned by the hawkish central bank shift that could lead to slower global growth and oil revenues later this year.”

Goldman said such a move by OPEC+ would result in a short-term blip for crude prices and wouldn’t change the bank’s bullish view. The rapid decline in Covid-19 cases, strong demand so far in 2022 and initial earnings from U.S. producers “all reinforce our conviction in the need for sharply higher prices,” the bank said.