Goldman ups OPEC+ supply forecast

Goldman Sachs on Friday said it expects OPEC+ to announce a second consecutive increase in supply for June on Saturday, due to modest compliance from Kazakhstan, lower-than-expected OECD inventories, and Saudi Arabia's ability to handle lower oil prices.

The Wall Street bank expects the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to announce a 410,000-barrel-per-day (bpd) increase in supply for June in its meeting on Saturday, from its prior estimate of 140,000 bpd, according to a note.

Goldman Sachs' prior OPEC forecast relied on a substantial rise in compliance with production cuts, but Kazakhstan's compliance has risen only modestly, it said.

Moreover, inventories in the Organisation for Economic Co-operation and Development (OECD) countries for April undershot the bank's expectations by 28 million barrels due to supply misses in Venezuela and US shale.

"This week's drop in oil prices, and the rises in implied volatility and put skew suggest that the market's central expectation has also converged to a 410,000-bpd increase," Goldman Sachs said.