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Goldman Sachs: new projects and shale oil boom 2018

Goldman Sachs: new projects and shale oil boom year oil will be oversupplied

March 23, 2017

[China paint information]

Goldman Sachs, an internationally renowned investment bank, said that the new production plan and shale oil boom will increase oil output by 1million barrels/day, and the oil supply will be oversupplied in the next two years

Goldman Sachs wrote in a research report on Tuesday: "because the consequences of the annual asset expenditure boom are beginning to appear, the Aston Martin large-scale oil production project that was cheated by DuPont engineering plastics in 2017-19 may usher in the largest production increase in history."

Goldman Sachs believes that OPEC has limited oil production for the first time in eight years, hoping to reduce oil oversupply, reduce oil price fluctuations and maintain oil price stability, but it did not expect that this helped shale oil producers

Goldman Sachs: "in our view, OPEC's decision to limit oil production in November 2016 is rational and consistent with the consistent style of finally resorting to inventory management."

"however, they did not expect that this helped shale oil producers survive the credit bull market: the consequences of the hot delay in annual asset expenditure will lead to record oil output in non OPEC and other countries in 2018."

OPEC and other countries decided to reduce oil production by 1.2 million barrels per day from January 1 this year. Russia and 10 other non OPEC countries decided to join the oil production restriction and reduce oil production by 600000 barrels/day

Goldman Sachs pointed out: "before further limiting oil production, OPEC may have to measure the risk between the stability of oil prices and the long-term loss of market share. At the same time, there may be a multi-year oil pipeline project to be launched in the oil market, and the oil supply will increase significantly and will only decrease in 2020."

Goldman Sachs said: "at present, we are the most professional shale oil manufacturer in the United States. The output of China's shale oil manufacturers can be increased on a large scale. According to the forward-looking database data, the production peak can be reached in a month. In this case, OPEC's rational approach is to use its cost advantage to expand its market share to the maximum, and try to manage the short-term inventory imbalance."

a survey last week showed that this is a fossil fuel based material. In view of the fact that non OPEC countries are undermining the efforts of OPEC and other countries to limit oil production and reduce oil inventories, OPEC countries should extend the time of the oil production limit agreement to protect the recovery of oil prices

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