Agreement to reduce oil production agreement reached by OPEC on September 28, will lead to a rise in oil prices in the first half of 2017 at $7-10, it is noted in the forecast of analysts Goldman Sachs, referenced by Reuters.
In the case of “strict observance” of the transaction is the reduction of daily oil production will be from 480 thousand to 980 thousand barrels, notes Goldman Sachs. However, the investment Bank stresses that in the long run refers to the execution of the agreed OPEC limit for the extraction of “skeptical”. Analysts warn that rising oil prices in the case of the implementation of the transaction in the medium term will lead to the drilling of new wells around the world.
However, Goldman Sachs reiterated its forecast for prices of oil by the end of 2016 and first half 2017. According to the Bank, WTI by the end of 2016, will cost $43 per barrel, and in 2017 — $53.
On the news about the agreement between the OPEC countries on Wednesday evening, September 28, WTI crude oil gained more than 5% exceeding the mark of $47 per barrel. On Thursday morning, WTI became cheaper by 0.38% to $46,87 per barrel. Brent oil lost in the price of 0.72% and traded at $48,34.
September 28 countries — members of OPEC talks in Algeria agreed for the first time since 2008 to reduce the amount of oil production. The cartel agreed to cut daily production to 32.5–33 million barrels. Now, according to OPEC, the cartel countries extract of 33.24 million barrels. a day.
Societe Generale analyst Michael Wittner in a conversation with Reuters OPEC agreement called the agreement “a big surprise”. “The current uncertainty in respect of the transaction and associated news flow will contribute to continued high volatility in the next two months,” the analyst suggested.