Higher OPEC+ output unlikely to upset oil market rebalancing

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OPEC+ members’ decision to slowly ramp up production from next month will be balanced by increased demand as a result of the expected roll-out of coronavirus vaccines, Goldman Sachs said in a note dated Thursday.

The Organization of Petroleum Exporting Countries and Russia agreed on Thursday to ease oil output cuts by 500,000 barrels per day (bpd) to 7.2 million, from 7.7 million now, starting January.

“OPEC+ clearing the hurdle of exiting its current cuts in a coordinated way and its focus on both growing production and drawing inventories reinforces our conviction in a steady and sustainable rally in oil prices  through 2021,” Goldman said.

Goldman in its note also maintained its 12-month Brent  price forecast of $65 per barrel.