The recovery in oil, which has rallied 80 percent from lows reached in February, remains “fragile” as disrupted supplies return to market and prolong a global surplus, according to Goldman Sachs Group Inc.
Canadian output halted by wildfires is resuming, OPEC members are pumping more than expected and the price rebound may revive shale drilling in the U.S., the bank said in a report. Goldman maintained its forecast that U.S. crude will trade at $49 a barrel in three months’ time.
“We continue to view the recovery in prices and fundamentals as fragile,” the bank’s analysts wrote. “The deficit in the second half of 2016 will remain modest at current prices” and “a return into surplus is likely in the first quarter of 2017.”
Oil futures rose to a 10-month high last week as production losses in the U.S., Canada and Nigeria helped whittle away the surplus that sent prices to a 12-year low earlier this year.