Goldman Sachs Lowers Brent Oil Price Forecast to $70-$85 Per Barrel - What You Need to Know
Goldman Sachs has adjusted its forecast for Brent oil prices, lowering the expected trading range to $70-$85 per barrel. This revision, driven by factors such as high OECD inventories, slower demand growth from China, and increased U.S. oil production, highlights the intricate balance of supply and economic factors in global oil markets.
The unexpected stability in OECD commercial inventories, along with weaker demand growth from China, has contributed to the downward revision of the Brent price range. The surge in U.S. liquids supply and efficiency gains among U.S. shale producers have further impacted Goldman Sachs' forecast.
Looking ahead, Goldman Sachs has also revised its long-term outlook for Brent oil prices, reducing the fair value estimate for long-dated Brent prices and anticipating cheaper global prices starting in 2026. The organization expects OPEC to unwind its voluntary production cuts by the fourth quarter of 2024, potentially leading to additional downward pressure on Brent prices.
While Goldman Sachs remains cautious in its outlook, it acknowledges risks that could influence market dynamics, including high spare capacity, geopolitical tensions, and oil price volatility. Investors should stay informed and monitor these factors to make informed decisions about their finances and investments.