Goldman Sachs Commodities Research raised its Brent forecast for second and third quarter by 5 a barrel after OPEC and its allies kept the deal unchanged, and said discipline of shale producers is likely behind the groups slower output increase.

The Wall Street bank now sees Brent prices at 75 a barrel in second quarter and at 80 a barrel in third quarter of 2021, it said in a note dated Thursday.

U.S. shale producers have quickly responded to oil price gains in recent years, winning market share as Saudi Arabia and other major producers have cut output, although they held back on boosting production since pandemicled demand destruction last year.

The Organization of the Petroleum Exporting Countries and its allies OPEC on Thursday agreed to extend most oil production cuts until April, after deciding that the demand recovery from the coronavirus pandemic was still fragile.

OPECs supply strategy is working because of its unexpectedness and suddenness, Goldman said.

We believe it is now clear that OPEC is in fact pursuing a tight oil market strategy, with our updated supplydemand balance pointing to OECD inventories falling to their lowest level since 2014 by the end of this year.

The bank lowered its OPEC production forecast by 0.9 million bpd over the next six months, and said shale, Iran and nonOPEC supplies are likely to remain highly inelastic to prices until the second half of 2021, allowing OPEC to quickly rebalance the oil market.

Key will be the potential…