• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 19 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 days Does Toyota Know Something That We Don’t?
  • 2 days America should go after China but it should be done in a wise way.
  • 8 days World could get rid of Putin and Russia but nobody is bold enough
  • 10 days China is using Chinese Names of Cities on their Border with Russia.
  • 11 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 11 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 10 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 20 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 11 days Putin and Xi Bet on the Global South
  • 11 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
Supply Chain Woes Could Derail Biden’s Electric Vehicle Agenda

Supply Chain Woes Could Derail Biden’s Electric Vehicle Agenda

The Biden administration's electric vehicle…

Oil Prices Remain Rangebound As Volatility Fades

Oil Prices Remain Rangebound As Volatility Fades

Oil price volatility has fallen…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Goldman Sachs: ‘Very Oversupplied’ Market To Stop Crude Rally At $55

Low-cost players such as Russia, combined with an upcoming ‘wall of supply’ from large-scale projects commissioned in the past 5-10 years, and additional supplies from Libya and Nigeria will make it difficult for crude prices to rise above US$55 in the near term, Goldman Sachs’s head of commodities research, Jeff Currie, said in an interview with Bloomberg television.

Oil prices have surged by more than US$5 since the OPEC deal on output was announced a week ago.

At the time of writing, WTI Crude traded up 1.87 percent to US$49.60 and Brent Crude was up 1.75 percent at US$51.76, also on the back of Tuesday’s report by the American Petroleum Institute (API), which showed an unusually strong draw of 7.6 million barrels of oil despite expert predictions that U.S. supplies would increase by 1.5 million units in the wake of multiple draw weeks.

Speaking to Bloomberg, Goldman Sachs’s Currie said he sees the market “very oversupplied” next year, and it was the oversupply side that made the OPEC members reach the agreement to limit the cartel’s production to a band of between 32.5 million and 33 million barrels a day, according to the analyst.

Low-cost players like Russia are increasing production, as well as market share, and that’s the “core of the new oil order”, the analyst noted.

Large international oil companies “destroy wealth, and right now they are not focused on return on equity; they are focused on creating cash flow,” Currie said. These companies are focused on “bringing on large-scale projects that could guarantee cash flows over the forward time frame; they are not focused on return”.

Last week, Goldman Sachs said that the OPEC output deal could add US$10 to crude prices. The Goldman analyst team, however, noted that it was skeptical about the chances of success for the deal. The bank pointed out that OPEC members don’t always feel obliged to stay within quotas, which will contribute to the ongoing uncertainty on oil markets.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Tave on October 05 2016 said:
    Article could be abbreviated to 3 words: Goldman Short Oil
  • TS on October 06 2016 said:
    Just to expand on what has been said earlier by Tave.....and let the fund managers in our company make a lot of money for our investors and hefty bonuses for themselves. Don't care what the supply demand fundamentals are. Who knows? Its all up in the air.

    Everyone knows what they predicted prior to 2014. Can they be relied upon??

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News