The Wall Street bank had already factored in the possibility of high oil prices long before Russia and Saudi Arabia announced, earlier this week, that they were extending production cuts through the end of 2023. That announcement lifted Brent crude oil above $91 a barrel for the first time in 10 months. Brent crude is the world’s oil price benchmark and is produced in the North Sea.

Goldman Sachs had forecast Brent oil to be $86 in December and $93 at the end of 2024. Now, the bank says it sees “two bullish risks” to its prediction, CNN reported.

First, Goldman Sachs expects Saudi oil supply to be 500,000 barrels per day (bpd) smaller than previously anticipated. That alone should add $2 to the per-barrel price of oil.

Secondly, Goldman Sachs warned that some of its assumptions for oil production may be incorrect if the OPEC+ cut extensions continue.

The bank had expected that in January the countries would bring back half of the 1.7 million bpd cut that was announced in April. Now the bank is floating the possibility of an even longer extension.

“Consider a bullish scenario where OPEC+ keeps the 2023 cuts…fully in place through end-2024 and where Saudi Arabia only gradually raises production,” analysts at Goldman Sachs wrote in the report.

In that scenario, Brent oil prices would likely climb to $107 a barrel in December 2024, the bank said.