Goldman Sachs expects robust oil production growth in the Permian basin, the largest U.S. oilfield, and high OPEC spare capacity to likely support the ceiling of their $75-90 per barrel Brent price forecast in the short run, the bank said in a research note on Tuesday.
However, limited upside to maturing Permian production is likely to support the Brent price floor in the longer run, the bank added.
Production growth in maturing Permian is likely to gradually slow down 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 edge down below 300 by end-2026 as U.S. producers remain capital disciplined, Goldman said.
In the Permian formation in West Texas and eastern New Mexico, the total oil and gas count was at 309 last week, according to energy services firm Baker Hughes.
“Geological constraints will continue to weigh on growth in initial production of new growing wells, limiting the basin’s longer-run production potential,” the note said.
(Reporting by Anjana Anil in Bengaluru Editing by Marguerita Choy)