As Brent moves back below US$50 a barrel esteemed experts expect it to stay there (more or less) for some time yet.
Both the oil price and the crude market’s fundamental recovery remain fragile, according to Goldman Sachs.
The investment bank has extended its prediction that crude will stay priced below US$50mln for another year. In a note Goldman Sachs repeated its forecast for oil to remain between US$45 to US$50 through to summer 2017.
Goldman analyst Damien Courvalin said: “while discussions of an OPEC freeze and a weakening dollar have been catalysts for the sharp reversal in oil prices this month, we believe neither will be sufficient to support prices much further.
“In our view, thawing relationships between parties in conflict in areas of disrupted production would be more relevant to the oil rebalancing than an OPEC freeze which would leave production at record highs and could prove counter productive if it supported prices further and incentivized activity elsewhere.”
Courvalin noted rising flows of crude from Northern Iraq, resumption of export facilities in Libya and a ceasefire in Nigeria as three signals that recent supply disruptions are easing.
In London trading Brent crude dipped 0.7% to US$48.80 while West Texas Intermediary futures were 0.5% lower at US$47.15 per barrel.