Goldman nudges 2017 Brent oil price forecast higher

However, the same production cuts which would boost oil prices in 2017 were seen triggering a supply response that would lower them back down over the following year.

Analysts Henry Tarr, Duncan Miligan, Maria-Laura Adurno and David Cheng now saw Brent averaging $57.0 a barrel through 2017, versus $54.0 a barrel before, but $58.0 a barrel in 2018, against the $63.0 they had previously projected.

The price of Brent would peak at $59.0 a barrel in the second quarter of 2017, Goldman said.

Compliance on the part of the cartel remained "uncertain", with low-cost non-OPEC producers still expected to offset lower revenues by increasing volumes.

In the equity space, "a more stable macro environment allows companies to differentiate through superior growth, execution or asset quality."

Goldman pointed out the growth, attractive dividend yields and restructuring potential it saw at Royal Dutch Shell, ENI and Repsol.

In the services space, its preference was for Saipem, Petrofac, Tecnicas Reunidas and Hunting given their exposure to the US and Middle East.

Lastly, among exploration and production outfits Lundin and Aker BP's exposure to the Johan Sverdrup field and the expected inflection in their cash flows in the fourth quarter of 2016, "will deliver strong equity returns in a flat price environment," Goldman said.