Goldman Sachs said it remained cautiously optimistic on oil prices, despite the rebound over the past month.
Supportive factors included stock drawdown, falling U.S. rig count and robust demand, it said, but too large a price recovery will increase downside risk as shale production can ramp up rapidly, it added.
"While OPEC's production path remains uncertain, recent fundamental oil data have come in even better than we had expected," Goldman said. "If sustained, these trends would help achieve the normalization in inventories by early next year."
Data out of the U.S., Europe, Singapore and Japan point to overall inventory declines of 83 million barrels since March, according to Goldman's data. Europe, the U.S., India and China were driving up consumption and Goldman expected this strong demand growth to remain in place through the second half of the year. Its forecasts pointed to sustained draws through the third quarter of the year.
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