Analysts at Goldman Sachs noted that an oil supply agreement between Saudi Arabia and the United Arab Emirates would be a bullish catalyst for prices in the coming months, assuaging market concerns about tighter oil supplies.
According to Reuters, both Middle Eastern oil producers have reached an agreement on OPEC+ policy.
“Such an agreement would help bridge the (modest) gap between the two countries while also removing the (low probability) OPEC+ tail risks of a price war or insufficient production growth,” says the report.
“We believe the risks to our bullish oil price forecasts are skewed to the upside, with the catalyst for such a move higher shifting away from demand and toward supply.”
“A lack of an Iran nuclear deal would increase its 2022 price forecast by $10/bbl.” Expect a $2 to $4 per barrel upside risk to its $80 per barrel summer forecast and $75 per barrel for its 2022 Brent price forecast.
WTI reclaims the $72 mark ahead of the OPEC monthly report.
Crude Oil Futures: Pullbacks appear to be limited./n
