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Analysts at Goldman Sachs offer an optimistic outlook on Brent oil for 2021, despite the conflicting fundamentals.

Key quotes

“Brent seen higher next year amid a market rebalancing on a vaccine-led demand rebound and only a modest non-OPEC supply response.”

“However, the market faces declining short-term demand in Europe due to the spread of virus lockdowns … “winter wave” will cause a 3m b/d hit to global oil demand, which will only be partially offset by heating and restocking demand.” 

“Conflicting signals likely to keep prices volatile in coming weeks will further complicate OPEC+’s decision to delay or implement its scheduled 1.9m b/d January production increase.” 

“The base case is a 3-month delay in the OPEC+ output cuts.”

“If the cuts not extended oil to drop $5/bbl from current levels.” 

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