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Oil will need to trade between $45-$50 per barrel to reach supply deficit: Goldman Sachs

A series of production disruptions in Nigeria, Venezuela, Libya and Canada pushed oil to a 2016 high of $52.86 last week

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Goldman Sachs

Reuters 

Oil will need to trade between $45-$50 per barrel to reach supply deficit: Goldman Sachs

on Wednesday said it expects the oil price recovery to stall near recent price levels, and crude will need to trade between $45-$50 per barrel for the market to reach a supply deficit in the second half of 2016.

The bank said it continues to expect that non-OPEC production excluding the United States will decline by 4,30,000 barrels per day this year to help put the market into the deficit.

Goldman said the market is likely to remain close to balance in June as Canadian production restarts and production elsewhere remains resilient.

A series of production disruptions in Nigeria, Venezuela, Libya and Canada pushed oil to a 2016 high of $52.86 last week.

"We continue to view the recovery in prices and fundamentals as fragile," analysts at the investment bank said.

"In particular, we expect that the deficit in second half of 2016 will remain modest at current prices and that a return into surplus is likely in the first quarter of 2017 before inventories normalise by end-2017."

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First Published: Wed, June 15 2016. 16:31 IST
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