Leading global investment banking Goldman Sachs in its 2018 oil price forecasts says Brent crude will touch US$80. This comes as a result of oil producers’ limit to output and US drillers’ incapacity to meet global demands.
Brent crude is the benchmark for oil prices. Goldman identifies Brent valued at US$75 per barrel over next three months. According to CNBC, J.P. Morgan analysis sees Brent valued at US$70 in 2018; and the price will increase to US$78 in the first half of the year.
“Importantly, all the pillars of the New Oil Order remain intact in our view so this is a cyclical call,” Goldman Sachs analysts Jeff Currie said, “The New Oil Order is on hiatus with its next point of reckoning likely a few years away.”
US is growing exponentially in oil production and has fueled its output; and will potentially beat Russia, world’s largest crude producer.
Many US drillers and oil majors have decided to sharply focus on ‘efficiency’ and ‘fiscal discipline.’ The investment bank also considers other factors such as ‘backwardation in oil markets,’ which determine the oil prices in future.