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Larger-than-expected production cuts by some major oil suppliers and falling seasonal crude inventories due to growing demand are set to push up oil prices, Goldman Sachs said.

The U.S. bank expects benchmark Brent crude prices to touch $67.50 per barrel in the second quarter of 2019, up from $63.07 per barrel at 0638 GMT on Wednesday.

The Organization of the Petroleum Exporting Countries (OPEC) this week said it had cut oil production steeply under a global supply deal, curbing output by almost 800,000 barrels per day in January to 30.81 million bpd.

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“The production losses to start 2019 are already larger than we expected,” Goldman said in a research note dated Feb. 12.

“Producers are adopting a ‘shock and awe’ strategy and exceeding their cut commitment.”

The bank also said that crude supply was being disrupted by U.S. sanctions that kicked in last month on Venezuela’s oil exports.

“Disruptions have increased with risks that Venezuela’s production decline accelerates following the introduction of additional U.S. sanctions related to the Venezuelan oil industry,” the investment bank said.

“The improvement in oil fundamentals is already visible in the recent greater-than-seasonal decline in inventories.”

The American Petroleum Institute (API) on Tuesday said that U.S. crude inventories fell by 998,000 barrels in the week to Feb. 8 to 447.2 million, compared with analyst expectations for an increase of 2.7 million barrels.

But Goldman said it was cautious on the price-outlook for the second-half of 2019 as low-cost producers increase output.

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