Increasingly some of the more prominent sellside analysts appear to be picking and choosing ideas from their competitors. Earlier, it was JPM echoing Goldman’s reco when it cut its 10Y yield forecast. Now, in a note previewing the outcome of this week’s OPEC meeting and proposing a way forward for OPEC, Goldman’s Damien Couravlin adopted the “backwardation” idea presented last week by Morgan Stanley’s Francisco Blanch.
As a reminder, Blanch’s latest thesis on oil market dynamics, is that “OPEC’s goal for the oil market is not a specific price level, but reaching backwardation“, (which is also why he does not believe that OPEC will proceed with deeper cuts as this would likely mean ceding more market share to U. S. shale production).
Fast forward to Monday, when Goldman’s energy strategist Damien Couravlin effectively cribbed the whole note by writing that while “oil prices are rebounding with stock draws and greater certainty on an extension of the production cuts” and a “9 month extension would normalize OECD inventories by early 2018” he warns that he sees “risks for a renewed surplus later next year if OPEC and Russia’s production rises to their expanding capacity and shale grows at an unbridled rate.”
This post was published at Zero Hedge on May 22, 2017.