The crude oil prices will keep are current levels in 2018, according to the analyze of the investment bank Goldman Sachs. According to the experts, OPEC and its allies will observe the agreement on shrinking oil production more strictly. Last week, the oil cartel and other producers, including Russia, agreed to continue with the cuts in mining by the end of next year.
The investment bank report expects a returns of 9% on crude oil in the next 12 months.
Goldman’s position differs from that of Citigroup with bearish attitudes. Citigroup predicts that OPEC, Canada, Brazil, Russia and the United States will increase their oil reserves. The US investment bank, however, warns that shale producers will start to react to more expensive oil in 2019.
“We continue to believe that OPEC’s assessment for reaction of supply to higher prices is too conservative, especially as far as shale manufacturers are concerned”, says the report of Goldman Sachs.
The investment bank lowers its production forecasts in OPEC and Russia by 350,000 barrels per day to 44.3 million barrels per day in 2018. The creditor is optimistic about global oil demand.