Analysts at U.S. investment bank Goldman Sachs (GS) have cut their outlook for oil by nearly 10% as the price of crude falls to $68 U.S. per barrel, its lowest level in a year.
In a note to clients, Goldman Sachs said it is worried about increasing supply and slower demand for crude oil moving forward.
Consequently, the investment bank lowered its forecast for the price of Brent crude oil for December to $86 U.S. a barrel, down from $95 U.S. a barrel previously.
Goldman Sachs also revised down its forecast for West Texas Intermediate (WTI) crude oil for December to $81 U.S. a barrel from $89 U.S. previously.
Currently, Brent crude oil, the international standard, is trading at $73.08 U.S. per barrel, while WTI crude, the American benchmark, is trading at $68.19 U.S. a barrel.
The revised year-end outlook represents the third time in six months that Goldman Sachs has revised down its forecast for oil prices.
The latest downgrade comes a week after Saudi Arabia announced plans to voluntarily cut its oil production by one million barrels per day starting in July.
Goldman Sachs said it doubts that the planned production cut by Saudi Arabia will result in an oil price increase.
The oil cartel OPEC+ has made no changes to its planned oil production for the remainder of 2023, and Russia’s oil production has remained resilient despite Western sanctions, said Goldman Sachs.
The investment bank also made upward revisions to oil supplies coming from nations that have sanctions imposed on them, with “2024 upgrades for Russia, Iran, and Venezuela of 0.4/0.35/0.05 mb/d, respectively.”
Goldman Sachs’s stock has risen 19% over the past 12 months to trade at $336.02 U.S. per share.
