It is not in OPEC’s interest to balance the market in the face of still growing higher-cost production, analysts of the Goldman Sachs bank believe.

In a report, obtained by Trend, analysts say that OPEC’s resolve not to cut production strengthened after US activity picked up once prices neared $60 a barrel last summer.

Despite the fiscal challenges that low oil prices create now, the alternative of cutting production reduces long-term revenues instead, they say. As a result, analysts view OPEC production growth and the economic stimulus of drilling as the required strategy to help offset low prices.

“The one scenario where we could see OPEC cut output is one where fundamentals push prices down to the steep part of the cash-cost curve. Such a cut would occur at lower prices and for now the market needs to rebalance through low prices,” analysts said.

OPEC's crude oil production increased to 31.5 million barrels per day during last two years, 1.5 million barrels per day more than the determined 30 million barrels per day.

OPEC oil basket price plunged to $27.07 on Jan.11. According to OPEC's official website, this figure is $11 less than Dec. 4, 2015 when the member countries failed to agree on determining a new production ceiling.

Goldman Sachs’ analysts expect more crude oil production growth from OPEC next year, up 640,000 barrels per day year over year, driven by Iran and core OPEC.

For Iran, analysts assume that production will grow by 285,000 barrels per day year over year on average, on the assumption that international sanctions are lifted in the second quarter of this year.

Analysts also expect growth in Saudi, Kuwait and UAE production of a relatively modest scale, with new highs in 3Q16 only 300,000 barrels per day above 3Q15.

OPEC production will amount to 31.978 million barrels per day in 2016 and 31.152 million barrels per day in 2017, according to the Goldman Sachs report.