Goldman says reported OPEC-plus output cuts reinforce its bullish oil view

Goldman Sachs said a production cut under consideration by the Organization of the Petroleum Exporting Countries (OPEC) and its allies was justified by the sharp decline in oil prices from recent highs and supported its bullish view.

OPEC+ is discussing output cuts of more than 1 million barrels per day (bpd), sources told Reuters, and voluntary cuts by individual members could come on top of that, making the reduction the largest since the start of the COVID-19 pandemic.

Oil prices jumped more than $3 per barrel in response.

“We reiterate both our bullish oil view as well as our preference for long crude timespread positions into year-end,” the bank’s commodities research division wrote in note on Monday.