Decline in non-OPEC production key to recovery of oil price: Report

The key to a sustainable recovery in oil prices will be stable declines in non-OPEC (Organization of the Petroleum Exporting Countries) production, top commodities bank Goldman Sachs said on Monday. 

In its base case scenario, Goldman said it expects a sustained deficit in the third quarter of the year, until which oil prices are seen trading around current levels. 

Crude oil futures were trading around $44 a barrel on Monday after the market shrugged off a cut of 1 million barrels per day in Canadian oil production due to a wildfire. 

In a separate note to clients, the bank said it sees a decline in US oil production by 650,000 barrels per day (bpd) this year.

"Overall, we view US productivity gains and a narrower US decline as indicative of the secular shale productivity trend we see keeping long-term WTI oil prices in the $50-$60 per barrel range."

In its latest short-term outlook, the US Energy Information Administration said in April that crude production was set to fall by 830,000 bpd this year, and drop 560,000 bpd to 8.04 million bpd next year.