OPEC freeze will not push up crude prices, Goldman says

NEW YORK (AA) -- An OPEC production freeze and weak dollar would not be able to keep oil prices higher, according to Goldman Sachs.

The global investment bank said potential for those conditions helped oil prices recover earlier this month but "neither will be sufficient to support prices much further”.

Since meeting in November 2014 to discuss falling oil prices, OPEC 's strategy has been to refuse to trim production to keep prices low until high-cost producers such as the U.S. are pushed out of the market.

If OPEC decides to freeze its output at an informal meeting in Algeria at the end of next month, Goldman said it would be "self-defeating" and it would not help the global oil market.

"An OPEC freeze which would leave production at record highs could prove counter productive if it supported prices further and incentivized activity elsewhere," the bank said in a report late Monday.

Goldman also emphasized that since two regional rivals, Saudi Arabia and Iran, focus on their individual market share, it would be "unlikely to unilaterally accept a freeze or implement a jointly agreed one”.

Iran refused to cut its production the last time OPEC countries and Russia met in Doha in April to discuss how to stabilize oil prices. After Iran's refusal, Saudi Arabia walked away from the negotiation table.

Goldman expects the international benchmark Brent crude to average $45-$50 a barrel through next summer, but it lowered its price projection for West Texas Intermediate.

The bank now expects the American benchmark to average $45 a barrel, instead of $52.5 due to 500,000 barrels a day of increased output that could return from previous supply disruptions.