Analysts at Goldman Sachs Commodities Research warned that greater oil production from OPEC and its allies (OPEC+) is needed to balance the market by 2022, ahead of the highly anticipated OPEC and its allies (OPEC+) meeting on July 1.
“While a large new infection wave could slow market rebalancing, we expect OPEC+ to remain tactical in its output hikes, with downside risks to global supply elsewhere pointing to a more robust outlook for crude and the upstream sector than petroleum products and the downstream sector,” says the report.
“When the group meets on July 1 to discuss the danger of the Delta COVID variation, the probable return of Iran output, and the still tardy shale response, see a base scenario of 0.5 mbpd supply rise from OPEC+ producers for consecutive months.”
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