International crude oil prices fell for the third consecutive week, dropping 3% due to easing concerns over supply risks from the ongoing conflict in Israel and Lebanon. According to Goldman Sachs, OPEC+ supply cuts are expected to support near-term upside to Brent crude oil prices.
The price of Brent crude fell 0.46% to $72.94 per barrel, while US West Texas Intermediate (WTI) crude futures dropped 1.05% to $68. The decline was largely due to muted trading activity in the US market ahead of the Thanksgiving holiday. However, despite this, oil production from key producers such as Iraq, Kazakhstan, and Russia declined by 0.5 million barrels per day in November.
Goldman Sachs expects OPEC+ supply cuts to be extended, with analysts saying that compliance rates are high and member countries are working together to stabilize prices. The bank forecasts Brent crude prices to average $74.53 a barrel in 2025, and maintains its average forecast at $76 per barrel for the same year.
In contrast, Saudi Arabia is expected to extend oil production cuts due to the recent price drop. Goldman Sachs now predicts that these cuts will last until April 2025, rather than January.
The Organisation of Petroleum Exporting Countries (OPEC+) has agreed to delay a planned output hike scheduled for December, with the group’s members discussing a further delay. Analysts say that any ramp-up in OPEC+ production will be gradual and data-driven.
Despite the decline in prices, oil prices have remained largely stable this year, trading within the $70-$80 range. Goldman Sachs revised its forecast for Brent crude prices to average around $80 per barrel this year, citing an anticipated surplus in 2025.
Source: https://www.livemint.com/market/commodities/brent-shy-of-73-us-wti-sheds-over-4-in-5-days-on-easing-supply-risk-goldman-sachs-in-favor-of-opec-cuts-11732961034741.html