Goldman Sachs calls an end to oil supply glut

Goldman Sachs has provided some welcome good news for the downtrodden oil industry, claiming the global supply glut that caused prices to tumble has ended for the time being.

Brent crude prices shot up 1.2% to $48.67 after the investment bank said that “sustained strong demand as well as sharply declining production” had likely led to a supply shortfall this month.

“The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected,” it added.

Goldman predicted that, by the end of this year, there would be a shortage of more than 400 million barrels per day. The first half of 2017 would see a return to a surplus, however.

Energy giant BP, meanwhile, doubled its stake in the Culzean North Sea gas field, despite what it described as a “challenging time for the industry”.

It bought an extra 16% in the project, which is expected to produce enough gas to meet 5% of total UK demand by 2021, from JX Nippon as part of efforts to refresh its North Sea portfolio.

Production on the Maersk-operated field is expected to start in 2019 and continue into the 2030s.