Goldman Expect OPEC Oil Seaborne Export Boost to be Temporary

The recent uptick in OPEC seaborne oil flows on the market will be temporary according to Goldman Sachs’ head of oil research Daan Struyven in a CNBC interview earlier this week.

• Struyven said the latest crude sell-off reflects three factors, a reduction in the geopolitical risk fear, a reduction in positioning and several signals that the oil market may not be tightening as much as expected at present.
• “Estimates of exports by OPEC countries, which announced a cut in April, were very low in the summer but had risen by roughly 1mn bpd roughly over the last couple of months” Struyven said, which helped to explain why the oil markets were not seeing the large draws they were expecting.
• “Our assumption is the recent pick up in exports by OPEC countries is temporary and likely reflects destocking” Struyven said as producers took advantage of high prices in recent months.
• “Looking forward, we [Goldman Sachs} still think that OPEC will be able to keep Brent prices in a high range, from $80-105/bbl” he said, adding “we still look for deficits next year because we still think demand growth will continue to be firm” he said.

source: Goldman Sachs