(Bloomberg) -- The latest OPEC production cuts will prompt a draw in oil inventories, sending prices into the low $90s, Goldman Sachs Group Inc.’s Global Head of Commodities Research Jeffrey Currie said in a Bloomberg TV interview.  

“You’re going to be seeing substantial physical inventory draws because of these OPEC production cuts, particularly in the third and fourth quarter,” he said. “That’s going to push us up into the low $90s.”

Oil prices have remained weak in the immediate wake of Saudi Arabia’s pledge to cut more barrels as lackluster demand and ongoing fears about economic growth shadow the outlook. Money managers currently hold the most bearish stance across all major oil contracts in more than a decade, exchange and CFTC data compiled by Bloomberg show.

Higher interest rates have made it too expensive to keep oil in storage and investor interest is unlikely to return until inventories start to decline, Currie said. The net cost to hold physical inventories is at about 13-15% in the current environment. 


©2023 Bloomberg L.P.