Goldman Sachs says OPEC oil quotas could add 7 to 10 dollars a barrel

Investment bank responses to the OPEC oil production cut agreement starting to come out

• Goldman Sachs says OPEC oil quotas could add 7 to 10 dollars a barrel in the first half of 2017
• If the agreement is "strictly implemented"
• Goldman Sachs note that if cuts come into effect, production would still be around 33.7m b/d above current production levels
• The current Goldman Sachs price forecast is $43/bbl oil (2017 forecast for $53/bbl), the bank stays with this citing the uncertainty on the OPEC proposals
• Goldman Sachs add that quotas are likely to be exceeded

From CIBC:

• Had been forecasting an average WTI price of $51/bbl in 2017
• With this announcement likely to increase that by around $5/bbl
• See a plateau for crude prices at the $60/bbl level
• Today's news suggests we are likely to see that equilibrium reached a few quarters earlier
• Perhaps by the end of 2017