The outlook for oil is still bullish, according to Goldman Sachs Group Inc.A plan by Saudi Arabia and Russia to revive production after over a year of curbs to clear a global glut signals supplies are currently tight, and isn’t a bearish development, analysts including Damien Courvalin wrote in a report. Even if the nations boost output by 1 million barrels a day, that would only offset involuntary production declines, according to the bank.Goldman has been an oil bull since early last year, saying growing demand and output reductions by Opec and its allies will help revive crude from the worst crash in a generation. Now, as prices retreat after surging to levels last seen in 2014, the bank’s sticking to its optimistic stance and sees the current decline as temporary. Futures in London had risen above $80 a barrel earlier this month for the first time since November 2014. The countries are said to have concluded that the market re-balanced in April.A gradual implementation of a plan to boost output by 1 million barrels a day would still leave the market in deficit through the third quarter of 2018, according to Goldman.

Source: Economic Times May 28, 2018 08:15 UTC