OPEC now an inventory manager rather than price setter, says Goldman

by Dramelin 8:30 PM 0 comments

"OPEC`s decision in November 2016 to cut production was rational, in our view, and fit into its role of inventory manager of last resort," the analysts said.
The decision to cut output may have stabilized prices for a while, but it unintentionally helped shale producers, the bank said.
Crude oil prices extended losses during Asian hours on Wednesday, after the American Petroleum Institute reported late Tuesday U.
S.
hours that the country`s crude inventories rose 4.
5 million barrels to 533.
6 million barrels at the end of last week, beating expectations of a 2.
8 million barrels increase.
Such rise in oil stocks and increase production in the U.
S.
are undermining efforts led by the OPEC to cut supply in order to support prices.
Ahead of its meeting in May, there have been talks that OPEC is considering extending those production cuts beyond June as the impact has waned with a supply response by producers outside of the pact, Goldman Sachs said, adding that OPEC`s role has transitioned from a price setter to an inventory manager.