Baxia Markets
July 20, 2021

Crude oil price drops as producers agree to raise output

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The agreement which OPEC+ reached on Sunday is modestly bullish for Goldman Sachs’s forecast that Brent will hit $80 per barrel this summer, the investment bank said in a note after the group agreed to start adding 400,000 BPD production each month from August. However, the increased supply has not been met by the market demand, as the COVID began raging in some parts of the world yet again. 




Goldman Sachs strategists said they don’t think the OPEC+ deal is bearish for prices, “with supply increasingly becoming the source of the bullish impulse and evidence of non-OPEC supply shortfalls likely in the coming months (including shale discipline in the coming earnings season).”. Since then, they have reiterated their $80 price forecast, stating a strong summer demand is still on its way. If that’s the case, the current price dip is a good opportunity to replenish inventory.


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