OPEC meeting outcome 'more uncertain than usual' - Goldman Sachs

  • Crude oil prices continue to drift lower, extending yesterday's losses, as the market had expected this week's OPEC meeting to extend production limits by another 6-9 months, but this is now less certain; WTI -0.7% at $57.70/bbl, Brent -0.6% at $63.44/bbl.
  • Crude has climbed more than 40% since June and is near the highest level since 2015, but Goldman Sachs (NYSE:GS) warns prices could fall if the outcome of the OPEC meeting fails to meet expectations.
  • “We believe that the outcome of this meeting is much more uncertain than usual,” Goldman writes. “We view risks to oil prices as skewed to the downside this week as we believe that current prices, time spreads and positioning already reflect a high probability of a nine-month extension."
  • According to Wood Mackenzie: "If the production cut agreement ends in March 2018, our forecast shows there would be a projected 2.4M bbl/day Y/Y increase in world oil supply for 2018."
  • Now read: Crude Oil Has Significantly Out-Performed OIH Since June