Offering some comfort to market fears about an adjustment in oil production, analysts at Goldman Sachs noted that an oil supply deal between Saudi Arabia and the United Arab Emirates would be a bullish catalyst for prices in the coming months.
Reuters reported on Wednesday that the two Middle Eastern oil producers had reached an agreement on the policy of the Organization of the Petroleum Exporting Countries and its allies.
“Such an agreement would help bridge the (modest) divide between the two countries and help eliminate the (low probability) risks of a possible price war or insufficient production growth.“said Goldman Sachs. They believe the risks to their bullish oil price forecasts are skewed to the upside, with the catalyst for such movement shifting from the demand side to the supply side.
The forecast is for a summer price of $ 80 per barrel and $ 75 per barrel of Brent by 2022. In the event of a lack of a nuclear deal with Iran, this would raise its price forecast by $ 10 for 2022.
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