Brent crude could reach $95 a barrel after OPEC’s surprise production cut, according to Goldman Sachs. The firm boosted its price forecast from $90 for December 2023 after OPEC+ announced the move Sunday. The organization said it will slash output by 1.16 million barrels per day starting in May as a “precautionary measure” to stabilize the oil market. Oil prices surged in response. @LCO.1 1D mountain Brent crude futures (June ’23) Goldman also raised its forecast for December 2024 to $100 per barrel from $97 per barrel. The firm said OPEC+’s voluntary cut is consistent with their new doctrine to act preemptively because they can without significant losses in market share. “OPEC’s pricing power is higher than it has ever been,” Jeffrey Currie, Goldman Sachs’ global head of commodities research, said Monday in a CNBC ” Squawk Box ” interview. “They are going to continue to exercise that power.” The cuts will result in a 7% boost to oil prices and the modest reduction in variable costs will more than offset the 2.25% drop in OPEC+ sold volumes, according to Goldman. “This is a revenue maximizing decision,” Currie said. Goldman lowered its OPEC+ production end-2023 forecast by 1.1 million barrels per day. — CNBC’s Michael Bloom contributed reporting.
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