One of the biggest oil bear, Goldman Sachs, which predicted oil price towards $20/barrel (though it wasn’t their base case scenario) has revised its outlook up.

Main reason behind Goldman’s outlook has been unexpected outages and faster adjustments in supply side, especially from North America. According to the bank, supply outages, strike, wildfire and drop in production outside OPEC took away 3.75 million barrels/day out in May. These large supply cutback was countered by higher production from Iraq and Iran, but that wasn’t enough. So oil market is in deficit in May, according to the bank. Very close to 2 million barrels/day have gone offline in Canada, due to wild fire.

On the other hand demand growth has surprised on the upper side to 1.4 million barrels/day, thanks to India and China.

Goldman now forecasts price to average $50/barrel in second half of the year.

However the bank hasn’t changed its broader, lower for longer outlook. It expects average oil price to dip to $45/barrel.

After bottoming around $43/barrel in early May, WTI was up in four out of five trading days. Today WTI is up around 0.9%, trading at $48.2/barrel.