Goldman Sachs expects OPEC+ to extend the voluntary cuts in Q3

The US investment bank Goldman Sachs expects that the member states of “OPEC Plus” will fully extend the voluntary oil production cuts until the third quarter of this year, at a meeting next Sunday to consider production policies.

The bank believed, according to what Al Arabiya reported, that the increase in surplus oil production capacity limits the upward trend in crude prices, while OPEC’s management of the market, the low risk of an economic recession, and the pursuit of purchases to enhance strategic oil reserves curb the downward trend in prices, according to the “Arab World News Agency.”

He indicated that he still sees value in oil buying centers, which are betting on a rise in the price of crude, for reasons including his expectation that the oil market will remain in a state in which the spot price is higher than the forward price during the rest of this year thanks to strong demand and the extension of OPEC Plus production cuts.

He added that the second reason is that the value of oil as a hedging tool in the face of supply disruptions due to geopolitical factors is rising at a time when the geopolitical risk premium has decreased.

He stated that the third reason is his expectation that diesel refining margins will recover at a time when supplies are declining as a result of declining margins for Asian refineries and a shift in refining supplies away from diesel.