Goldman Sachs lowers Oil price forecast through Q416

Analysts at Goldman Sachs made downward revisions to its oil price forecast through Q4 2016, in wake of the ongoing OPEC meeting in Algeria.

Key Quotes:

“Our Q416 oil supply-demand balance is weaker than previously expected given upside surprises to Q3 production and greater clarity on new project delivery into year-end.”

“We are lowering our Q42016 forecast to $ 43/bbl from $ 50/bbl previously. While a potential deal could support prices in the short-term, we find that the potential for less disruptions and still relatively high net long speculative positioning leave risks skewed to the downside into year-end.”

“Despite a weaker Q42016, our 2017 outlook is unchanged with demand and supply projected to remain in balance. While our price forecast remains unchanged at $ 52/bbl on average for next year with a H117 expected trading range of $ 45-$50/bbl, we continue to view low cost and disrupted supply as determining the path of eventual price recovery.”

“As we wait for headlines from Algiers, it is worth pointing out the Iran, Iraq and Venezuela have each guided over the past month to a 250kb/d rise in production next year.”