Goldman Sachs sees a correction in oil prices on the horizon even amid a significant recovery in the last month and the recent decision by OPEC and its allies to extend historically large production cuts through July.
“With oil now above $40/bbl, supplies will be incentivized to return, but we believe the risks to the downside have increased substantially and are now looking for a 15-20% correction which may already be underway after Monday’s modest sell-off,” Goldman Sachs’ commodities research team led by Jeffrey Currie wrote in an analyst note on Tuesday.
