Goldman Sachs says it is unlikely that the Organization of Petroleum Exporting Countries (OPEC) will start boosting output anytime soon because of rising oil prices and inventories that still hover above their five-year averages. Oil's ascent in the past year and forecasts calling for the return of $100 prices have sparked concerns about the impact higher prices will have on global economic growth.
''It's still too early for OPEC to be raising production and their decision historically has not been price-based,'' Goldman analyst Jeff Currie said in an interview with Bloomberg News. Members of the 12-nation cartel have signaled recently that output hikes in the near-term are unlikely.
The United Arab Emirates' oil minister said he was not concerned about $100 oil, echoing comments from other OPEC members Iran, Venezuela and Algeria, the BBC reported. Venezuela's oil minister recently said $100 is ''fair value'' for oil prices. OPEC accounts for more than 40% of the world's oil supply.
While saying that it expects West Texas intermediate crude's discount to Brent crude other oil contracts to persist, Goldman said it experts West Texas to average $100 per barrel this year and $110 per barrel next year.