Goldman Sachs says it remains bullish on oil prices in 2021

The bank hiked its estimate for U.S. West Texas Intermediate crude to $51.38

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Lower crude production due to reduced activity and OPEC+ cuts, coupled with a partial recovery in oil demand, should drive prices higher next year, Goldman Sachs Equity Research said in a note.

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The Wall Street bank raised its 2021 forecast for global benchmark Brent crude prices to $55.63 per barrel from $52.50 earlier. The bank hiked its estimate for U.S. West Texas Intermediate (WTI) crude to $51.38 a barrel from $48.50 previously.

"Oil production has started to decline quickly from a combination of scaleback in activity, shut-ins and core-OPEC/Russia production cuts. Demand is also beginning to recover from a low base, led by a restarting Chinese economy and inflecting transportation demand in developed market economies," it said.

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Oil prices fell on Monday, having posted their first weekly gain in four on Friday as the Organization of the Petroleum Exporting Countries, Russia and other producers, known as OPEC+, began their record output cuts.

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Brent was last trading around $25.97 at barrel, while WTI was at $18.31.

(Reporting by Swati Verma in Bengaluru; editing by Richard Pullin)