Goldman Sachs Group stated in a report released on Sunday that, although geopolitical risks linked to Russia, Venezuela, and Iran will continue to cause market volatility, oil prices are expected to trend lower this year due to a wave of supply growth creating a market surplus.
The investment bank maintained its average price forecast for 2026 Brent crude / West Texas Intermediate (WTI) at $56 per barrel / $52 per barrel, and anticipates that Brent / WTI prices will bottom out in the fourth quarter at $54 / $50 per barrel as OECD crude inventories rise.
"Global crude inventories are climbing, and we forecast a daily supply surplus of 2.3 million barrels in the 2026 oil market. This implies that, barring large-scale supply disruptions or production cuts by OPEC, achieving market rebalancing will likely require lower oil prices in 2026 to slow supply growth from non-OPEC producers and support robust demand growth," Goldman Sachs said.
As of 04:12 GMT, Brent crude futures (LCOc1) were trading around $63 per barrel, while U.S. West Texas Intermediate futures (CLc1) held steady at $59. Last year, both major crude benchmarks recorded their worst annual performance since 2020, declining by nearly 20%.
Goldman Sachs analysts noted that U.S. policymakers' focus on ensuring ample energy supply and maintaining relatively low oil prices will curb any sustained price increases ahead of the midterm elections.
The analysts projected that oil prices will gradually recover by 2027. By then, as supply growth from non-OPEC producers slows and demand remains robust, the crude market is expected to return to a state of undersupply.
The bank adjusted its 2027 average price forecast for Brent / WTI to $58 / $54 per barrel, a $5 reduction from its previous outlook. This revision was attributed to increased supply expectations for 2027 from the U.S., Venezuela, and Russia, raised by 300,000, 400,000, and 500,000 barrels per day, respectively.
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