Goldman Sachs is predicting that the U.S. shale production will surpass global demand for oil in 2019. This will lead to a cap on oil prices until next year.
U.S. oil production will increase by 1.3 million barrels per day (bpd) in 2019. That will go up by another 1.2 million bpd in 2020.
However, the investment bank forecasts global oil demand growth will decrease to 800,000 bpd. U.S. shale growth will outstrip demand growth even with OPEC and its nonOPEC allies their extending production cuts to March 2020.
It is likely that OPEC’s continued cutback of production will rebalance the market and lessen the impact for oil prices through 2020, Goldman Sachs said.
Goldman Sachs is seeing an uptick next year in global oil demand growth, jumping to 1.6 million bpd.