US may hike oil output, says Goldman Sachs

Melbourne

US producers battling Opec for market share may increase output further from the highest rate in more than three decades as costs decline almost as fast as oil prices, according to Goldman Sachs Group Inc.

The slump in benchmark US crude futures, which are down more than 40 per cent this year, is driving producers to move drill rigs to lower-cost fields, the bank said on Monday. While there's evidence of some rebalancing starting to occur in the market, that isn't sufficient, it said.

A decision last month by the Organization of Petroleum Exporting Countries to maintain its output target prompted speculation that the group is willing to let crude slide to a level that would slow US production. Smaller member-nations including Venezuela, which have called for action to support prices, may play a role in rebalancing the market, Goldman sa…