NEW YORK (Reuters) - Goldman Sachs said on Thursday its forecast for oil demand growth in 2018 at 1.85 million bpd, despite recent signs of a slight slowdown, citing strong performance at the start of the year and accelerating demand in the second quarter.
"Oil data for January indicate a strong growth in global demand, consistent with strong economic momentum with the entry of 2018," the bank's analysts said in a note.
Goldman Sachs attributed the recent drop in oil prices to seasonal factors, saying the data for the last 10 years indicate that weak demand may come this time in the first quarter, after it was previously in the second quarter.
"This new pattern suggests that while demand expectations for the second quarter may be low, the seasonal demand drop may already be taking place, placing oil demand growth in a sudden upward trend this spring," analysts said.
While an economic data set published last week below market expectations and trade disputes and demand for oil may weaken, the effect is likely to be gradual and could be offset by a weaker dollar, the bank said.
"We still expect the overall macroeconomic situation in 2018 to continue to support oil demand, and our demand growth forecast for 2018 remains at 1.85 million barrels per day, well above the average forecast," Goldman analysts said.
The outlook for demand exceeds the growth of shale oil producers and other non-OPEC producers and will lead to further declines in stocks in the third quarter below the five-year average, resulting in a new price rally, the bank said.