opec-deal-800x500

Goldman Sachs sees 84% chance for OPEC deal to succeed.

Goldman Sachs (NYSE:GS) made a new report that showed that there is only an 84% chance for the OPEC deal to succeed,that means that oil production countries will reduce the production to the target this year.From January 1,2017 the deal is on to reduce oil production by millions of barrels per day and increase prices.
The investment bank note, sent by Goldman Sachs oil analyst Damien Courvalin, indicated that the normalization of inventories is the “key” to success for low-cost producers.
Damien Courvalin said in a note to investors:“That generates backwardation, which removes hedging gains from high-cost producers and helps low-cost producers grow market share.” 
For the first quarter,Goldman Sachs has also recently said that OPEC deal cuts would push the oil market into deficit,which in turn would shift the oil market into backwardation until summer.
The Saudis are expected to lead the way with the oil production cuts as others countries are expected to start soon.