Goldman Sachs warns that OPEC+ could step up its production plan during Wednesday’s virtual meeting amid high energy prices.
Oil prices are “entering political intervention territory,” Goldman Sachs said in a report, citing that it no longer assumes OPEC+ to stick to its monthly increase of 400,000 barrels per day. “We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations,” add the American investment bank.
Oil prices are on a rise as of late, boosted by tight supply from the omicron outbreak and concerns about tensions between Russia and Ukraine. The international benchmark Brent crude recently breached $91 per barrel, its 7-year high, while the West Texas Intermediate (WTI) surpassed the $88 level for its 7-year high as well.
However, Goldman Sachs remains bullish on the oil prices, saying that if OPEC+ brings forward its plan to increase output practically by 200,000 barrels a day, it would only make a $3 drop to the oil prices.
To back up its speculation on OPEC+, Goldman Sachs pointed out that inventory is at a critically low levels across a range of petroleum products and regions as well as critically low spare capacity to ramp up supply.
