Investing.com – Goldman Sachs raised estimates for crude oil in the second quarter of 2017, though the broker pointed out that gains were likely to be limited on the back of a stronger dollar.
“We expect that the potential ramp up in Libya and a stronger dollar will likely limit the near-term upside to prices and our December West Texas Intermediate (WTI) price forecast remains $50 a barrel,” these analysts said in a note to clients.
In the recent agreement among major oil producers to cut production starting in January, Libya was one of the countries excluded from the need to reduce output.
On the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers including Russia, Goldman expressed optimism that the parties involved would comply with the agreement.
“There will be little evidence of production cuts until mid- to late January which we believe will be the next catalyst for the next large move in prices,” they said, placing an estimate for WTI of $55 a barrel.
Meanwhile, Goldman also raised the forecast on West Texas to $57.5 a barrel in the second quarter of 2017, from the prior $55, as well as moving the estimate on Brent up to $59, from the previous $56.5.
“Beyond the first semester, we expect that the global market will remain balanced, with Brent prices between $55 and $60.”
Meanwhile, oil was trading slightly lower on Friday as U.S. crude oil futures lost 0.29% to $50.75 at 4:41AM ET (9:41GMT), while Brent oil fell 0.13% to $53.95.