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OPEC Has Elevated Pricing Power at Present: Goldman

OIL

OPEC has elevated pricing power at present as the group weighs whether to keep supply cuts in place over 2023 or reverse them earlier, Goldman Sachs said in a research note.

  • Pricing power, or the ability to raise prices without hurting demand too much, is “larger-than-usual”.
  • If OPEC were to keep supply cuts in place, Brent may rise to $107/bbl in December and extend gains in 2024.
  • At present, central case remains rise to $100/bbl by December according to the bank.
  • While Goldman’s central outlook incorporates decision by OPEC to reverse supply cuts at its June meeting as the market swings to a deficit, there are risks to that view.

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