Goldman: Contaversial signals will determine the price of oil due to the macroeconomic factros.
Oil's recovering fundamentals remain fragile, with many global factors offsetting each other, leaving a firmer U.S. dollar as the main driver of lower prices recently, Goldman Sachs said.
The Wall Street bank, which turned bullish on oil earlier this year, said oil prices will remain in a $45 a barrel to $50 a barrel trading range through mid-2017, with near-term risks skewed to the downside due to high inventory levels and the possibility of a stronger dollar.
Beyond these near-term uncertainties, however, our updated supply-demand balance is little changed and still points to a slow rebalancing of the global oil market over the coming year," the U.S. bank said.
Goldman said it viewed a rise in product inventories as a result of too much refining capacity and strong margins, not weak demand. It did not expect rising gasoline stocks to act as a catalyst for further price declines.
"In our view, it would take a global demand slowdown, a sudden sharp halt in China's crude inventory build or a ramp up in Libya or Nigeria production to take prices back below $35 per barrel."
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