Reuters is reporting investment bank Goldman Sachs take on the oil markets-
The historical lag between prices and rig response suggests that drilling may be about to surge in coming weeks.
Beyond the headline rig count, we find that it is the IG producers that have continued to steadily increase their drilling… private producers still lagging.
The expectation for strong oil demand growth and high OPEC compliance, we reiterate our constructive forecast on oil prices with global inventories set to fall further below their 5-year average levels through 3q18″.
The restraint exhibited by producers so far leaves us comfortable with our 1.1 MB/d us crude oil production growth forecast for 2018″.
US shale oil drilling response has started, although the increase in the rig count remains modest so far.
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