Robust Permian production, OPEC spare capacity to keep Brent at $75-90/bbl ceiling, Goldman says

Robust Permian production, OPEC spare capacity to keep Brent at $75-90/bbl ceiling, Goldman says

June 18 (Reuters) – Goldman Sachs expects robust growth in Permian oil production, the largest oil field in the US, and OPEC’s large spare capacity to likely support the expected Brent price ceiling of $75-90 a barrel in the near term, the bank said in a research note on Tuesday.

However, the limited upside to maturing Permian production is likely to support the Brent price floor over the long term, the bank added.

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Production growth in the maturing Permian is likely to gradually slow from exceptionally strong 520,000 barrels per day in 2023 to a still robust 270,000 bpd in 2026, it said.

The Permian rig count is expected to move roughly sideways this year but fall below 300 by the end of 2026 as U.S. producers remain disciplined by capital, Goldman said.

In the Permian formation of west Texas and eastern New Mexico, the oil and gas total was 309 last week, according to the energy services company. Baker Hughes.

“Geological constraints will continue to influence initial production growth from new incremental wells, limiting the basin’s long-term production potential,” the note said.

(Reporting by Anjana Anil in Bengaluru Editing by Marguerita Choy)