New York CNN Business  — 

Energy prices remain uncomfortably high, and OPEC and its allies are under pressure to come to the rescue.

The good news for consumers grappling with elevated pump prices is that Goldman Sachs is warning clients that OPEC+ could announce during Wednesday’s virtual meeting it plans step up production.

Noting that oil prices are “entering political intervention territory,” Goldman Sachs said in a report Monday night that it no longer assumes OPEC+ will simply stick to its monthly increase of just 400,000 barrels per day.

“We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations,” Goldman Sachs strategists wrote, noting that prices are now above the levels prior to what it described as a “small” US-led intervention last November.

Boosted by concerns about Russia-Ukraine tensions, US oil prices finished above $88 a barrel on Monday for the first time since October 2014. Brent crude, the world benchmark, recently climbed above $90 a barrel, blowing past Goldman’s target for the end of the first quarter.

The national average price for gasoline climbed to $3.38 a gallon on Tuesday, according to AAA. That’s 10 cents above the recent low of $3.28 and closing in on the seven-year high of $3.42 set last fall.

‘Critically low’ inventory levels

The bad news is that even if OPEC+ acts, the response may do little to cool off red-hot energy markets.

Goldman Sachs said that if OPEC+ brings forward its plan to raise output in April (translating to an extra 200,000 barrels per day of supply through the end of the year), the bank’s modeling points to just a $3 dent to oil prices. And the hit to prices would be “even less,” Goldman Sachs said, if Saudi Arabia decides to unilaterally boost production by half a million barrels per day for three months.

“Such an OPEC+ move would not change our bullish view,” the Wall Street bank said in the report.

Goldman Sachs cited “critically low inventory levels” across a range of petroleum products and regions as well as “critically low” spare capacity to ramp up supply.

Another factor: Goldman Sachs said shale oil producers including Hess (HES) and Chevron (CVX) have recently suggested they will boost output by less than expected.

Others don’t think OPEC will respond to the price spike – even though at some point it could start to erode demand.

“We do not expect the producer group to provide immediate comfort for consuming countries,” Helima Croft, head of global commodity strategy at RBC Capital Markets, wrote in a note to clients on Monday.

That’s even though, as Croft put it, oil prices are “wading deeper into President Biden’s political danger zone.”

OPEC’s fastest recovery since 1974

Yet OPEC nations are likely in no rush to stop the windfall to their battered budgets.

OPEC revenues rebounded by a staggering 80% in 2021, the fastest rate of recovery since 1974 following the Arab oil embargo, according to a new report from the Middle East Economic Survey (MEES).

“For countries that continue to suffer from profound political and security challenges, such as Iraq, this price surge is a welcome development that may push demand destruction concerns to the back burner,” Croft wrote.

The RBC strategist noted that higher commodity prices have “swelled” Russia’s foreign exchange reserves, potentially giving Moscow further room to withstand Western sanctions.

Industry experts have told CNN that oil prices could easily zoom past $100 a barrel if Russia launches a full-scale invasion of Ukraine.

Croft said that could provoke a response from Saudi Arabia, the leader of OPEC.

“We do believe the Kingdom’s calculations could change in the event that a conventional war breaks out on European soil and crude prices soar past the $100/bbl mark,” Croft wrote.