West Texas Intermediate could drop all the way to $50 per barrel towards the end of this year, Goldman Sachs energy analysts said in a note that cited an expected market imbalance with excess supply that would put pressure on benchmarks.
At the same time, the investment bank’s analysts noted the role of geopolitics as a counterweight for prices, according to a Reuters report.
“Rising global oil stocks and our forecast of a 2.3mb/d surplus in 2026 suggest that rebalancing the market likely requires lower oil prices in 2026 to slow down non-OPEC supply growth and support solid demand growth, barring large supply disruptions or OPEC production cuts,” Goldman said.
Right now, there is potential for just such a disruption from protests in Iran. ANZ analysts noted that protesters had called on oil industry workers to stop work and join the protests. “The situation puts at least 1.9 million barrels per day of oil exports at risk of disruption,” the bank said.
Goldman, meanwhile, sounded a more bullish note for 2027. By that year, the global oil market may have swung into a deficit, and prices could be recovering. The deficit, per Goldman, would be the result of a reversal in production growth among non-OPEC countries, presumably in response to the current price situation, and to an OPEC production slowdown. Even so, the investment bank projected Brent crude at $54-$58 per barrel for that year, down by $5 from an earlier price estimate for 2027.
Further out, Goldman analysts were even more bullish, citing robust oil demand supporting oil prices until 2040 and boosting investment after years of frugality in the industry on expectations of peak oil demand coming from net-zero-related forecasting outlets. By 2035, Brent crude could top $70 per barrel, the investment bank predicted. That, too, was a downward revision from earlier forecasts, again by 45 per barrel.
By Irina Slav for Oilprice.com
