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Goldman Sachs sees 410,000-bpd hike in OPEC+ June supply - REUTERS
(Reuters) - Goldman Sachs on Friday said it expects OPEC+ to announce a second consecutive increase in supply for June on Saturday, due to modest compliance from Kazakhstan, lower-than-expected OECD inventories, and Saudi Arabia's ability to handle lower oil prices.
The Wall Street bank expects the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to announce a 410,000-barrel-per-day (bpd) increase in supply for June in its meeting on Saturday, from its prior estimate of 140,000 bpd, according to a note.
The OPEC+ meeting was moved up to Saturday from the original plan of Monday, three sources told Reuters on Friday. The expected increase would be three times the level agreed in December to start unwinding cuts.
Goldman Sachs' prior OPEC forecast relied on a substantial rise in compliance with production cuts, but Kazakhstan's compliance has risen only modestly, it said.
Moreover, inventories in the Organisation for Economic Co-operation and Development (OECD) countries for April undershot the bank's expectations by 28 million barrels due to supply misses in Venezuela and U.S. shale.
Saudi Arabia has also signaled that it can weather lower oil prices, consistent with research from Goldman Sachs' economists, the bank said in the note.
"This week's drop in oil prices, and the rises in implied volatility and put skew suggest that the market's central expectation has also converged to a 410,000-bpd increase," Goldman Sachs said.
Oil fell 8% this week in their biggest weekly losses since the end of March ahead of the OPEC+ meeting, with Brent crude settling at $61.29 a barrel on Friday and West Texas Intermediate crude futures (WTI) at $58.29 a barrel.
Goldman maintained its oil price forecast, expecting Brent to average $63 and WTI $59 for the remainder of 2025, and Brent at $58 and WTI at $55 in 2026.
The bank estimated that a global slowdown or a complete reversal of the 2.2 million bpd of voluntary OPEC+ cuts could push Brent prices into the $40s in 2026, and below $40 in an unlikely extreme scenario.
(Reporting by Noel John in Bengaluru; Editing by Marguerita Choy)
