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Oil Could Reach $60 Even as OPEC Production Rises

"For 2018, our global real GDP growth forecast of 3.8% and Brent oil price forecast of $58 per barrel lead us to forecast demand growth of 1.51 million barrels per day."

Output by members of the Organization of the Petroleum Exporting Countries rose by 0.27%, to 32.75 million barrels a day in September, compared with August, The Wall Street Journal reports. A production surge from Libya and Nigeria, two countries exempt from OPEC's plan to curb output and boost prices, is partly to blame. Earlier this week, Saudi Arabia said it would export less oil by sea in November.

Elsewhere, Goldman Sachs analysts think hurricane Harvey will reduce third quarter U.S. oil inventories, and they note that non-OPEC ex. United States supply growth fell through 3Q due to planned maintenance -- notably in the North Sea, Azerbaijan, Kazakhstan and Brazil. Goldman commodity analysts Damien Courvalin, Jeffrey Currie, Henry Tarr, Callum Bruce, Huan Wei and Amber Cai reiterate their 2018 year-end forecast that the international Brent price of oil can reach $58 per barrel, with the expectation of backwardation of oil prices  -- the futures price falling below the spot price -- along the way.

 

Source: Barrons.com

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