Oil prices have struggled to rally above $64 a barrel since last quarter's sharp pullback, but Goldman Sachs believes crude futures could break out in the coming months.
The investment bank forecasts international benchmark Brent crude will peak at $67.50 a barrel in the second quarter. Goldman's outlook is based on its view that forecasts for demand growth have grown too gloomy and OPEC has adopted a "shock and awe" approach to pulling back supply.
"Our constructive outlook for oil prices in 1H19 is predicated on both large supply cuts as well as resilient oil demand growth," Goldman analysts said in a research note released on Tuesday evening.
Goldman believes the world's appetite for oil will grow by 1.4 million barrels per day in 2019. That's in line with the International Energy Agency's outlook, but above the consensus on Wall Street and OPEC's view that demand will grow by just 1.24 million bpd.