(Adds Goldman Sachs comment, industry background)
By Florence Tan
SINGAPORE, April 3 (Reuters) - Goldman Sachs has raised
price forecasts for Brent crude futures following a
surprise announcement from OPEC+ that the producer alliance will
cut oil output further.
The price forecast for Brent for December 2023 was increased
by $5 to $95 a barrel, while that for December 2024 was raised
by $3 to $100 a barrel, Goldman analysts said in a note on
Sunday.
The price forecast cut came as bank lowered its own end-2023
production forecast for OPEC+ - grouping the Organization of the
Petroleum Exporting Countries (OPEC) and other producers
including Russia - by 1.1 million barrels per day.
Brent futures surged to a near one-month high of above $86 a
barrel at the start of Monday's trading following the OPEC+
announcement. "Today's surprise (production) cut is consistent with the
new OPEC+ doctrine to act preemptively because they can without
significant losses in market share," the bank said.
"The risks around cutting production have become asymmetric
given how short positioning has become, and because price
increases in response to tightening events can be stronger when
the market is short."
Goldman said that while the move was surprising, the
decision reflects important economic and likely political
considerations.
The bank estimated that the output reduction could provide a
7% boost to oil prices, contributing to higher Saudi Arabia and
OPEC+ oil revenue.
OPEC+'s decision also came after the United States and
France announced releases from their strategic petroleum
reserves (SPR), the bank noted.
"The refusal to refill the U.S. SPR in fiscal year 2023,
although (U.S. benchmark) WTI lows that were previously
characterized as sufficient to refill, may have contributed to
the OPEC+ decision to cut too," it said.
(Reporting by Florence Tan; Editing by Josie Kao and Kenneth
Maxwell)
florence.tan.thomsonreuters.com@reuters.net))
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