07 January 2019, Sweetcrude, Lagos — International investment, bank, Goldman Sachs, now says international benchmark Brent crude to average $62.50 a barrel this year, down from a previous forecast of $70.
The new prediction was made in a research note published on Sunday amidst growing market supplies, and increasing U.S shale production.
“We expect that the oil market will balance at a lower marginal cost in 2019 given: higher inventory levels to start the year, the persistent beat in 2018 shale production growth amidst little-observed cost inﬂation, weaker than previously expected demand growth expectations (even at our above consensus forecasts) and increased low-cost production capacity,” analysts including Damien Courvalin and Jeffrey Currie told Reuters in an interview.
In December, OPEC+ agreed to cut production by 1.2 million barrels per day- OPEC will cut 800, 000b/d, while its non-OPEC partners will cut 400, 000b/d.
International benchmark, Brent crude traded at around $58.28 on Monday, up around 2 percent. OPEC’s daily basket price sold for $55.14p/b, while WTI stood at around $49.07.
According to the International Energy Agency, IEA, the U.S. production grew by almost 20 percent to nearly 12 million bpd by the end of 2018, making the country ahead of Saudi Arabia and Russia.