Goldman Sachs Group (GS) reaffirmed that the oil market will stay oversupplied through the end of next year after the world’s oil cartel decided to keep rigs humming.
The Organization of the Petroleum Exporting Countries made no changes at a key meeting Friday in Vienna, as expected, rather than implement production cuts. Don’t look for stability until low prices force curtailments of pumping in the U.S., says analyst Damien Courvalin. That won’t be until the end of next year, the analyst says, and not before production in the U.S. starts to slide:
“Low prices — not OPEC — will rebalance this market. …
Our forecast for a late 2016 rebalancing is predicated on a 0.5 mb/d decline in US Lower 48 production, which we believe is not yet on track at the current US oil rig count....MORE