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Goldman Sachs raised it's oil price targets after the OPEC production meeting, raising Brent price forecast for next year to $62 a barrel and WTI to $57.50 a barrel. They added more bullish language to their forecast saying risk are skewed to the upside. Goldman has basically just called the price at current prices with risks higher, hardly groundbreaking and more atune to their reportedly record long book.

Goldman Oil Price Forecast$GS Research Note Highlights

"Of course, risks remain and we see these as skewed to the upside into 2018 on the risk of an over tightening, either because of new disruptions, demand exceeding our optimistic forecast of OPEC letting the stock draw run hot," 

While OPEC deal "leaves room for an earlier exit than currently scheduled, we now reflect this resolve in our supply forecast, with full compliance for longer and a more modest exit rate,"

Of course, risks remain and we see these as skewed to the upside into 2018 on the risk of an over tightening, either because of new disruptions, demand exceeding our optimistic forecast of OPEC letting the stock draw run hot,"

Goldman Oil Price Forward Forecast

For 2019 Goldman Puts On It's Bearish Hat (And an out when 2018 doesn't pan out)

Looking further out, we believe that shale and other producers will start to respond to a higher price signal, which may lead OPEC and Russia to more aggressively ramp up within their spare capacity. This leaves risks to 2019 prices skewed to the downside in our view,” 

For 2019, Goldman sees WTI down to $55 a barrel and Brent to $59.50, by 2020 they call WTI to $50 and Brent at $54.5. $GS also sees more backwardation ahead.

“Greater backwardation will, in turn, provide long investors with positive returns despite a spot forecast near current levels and we forecast +9% crude total returns over the next 12 months,” the Goldman analysts said.

The February contract for Brent traded at $62.54 on Tuesday, while WTI cost $57.43 a barrel

Source: Goldman Sachs

From The TradersCommunity Research Desk

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