Goldman Sachs has adjusted its forecast for Brent oil prices, reducing the expected range by $5 to $70-$85 per barrel. This change is driven by weaker oil demand from China, high inventories, and increased U.S. shale production.
Analysts at Goldman Sachs noted that commercial oil inventories have remained stable during the peak summer demand season, contrary to earlier predictions of a drawdown. This stability has been attributed to higher U.S. oil supply, which has partially offset seasonal demand increases.
The rise in U.S. shale production, coupled with potential additional supply from OPEC+ later this year and in 2025, has led Goldman Sachs to predict that Brent crude prices will average below $80 per barrel next year. The bank now forecasts an average price of $77 per barrel for Brent in 2025.
Goldman Sachs suggests that OPEC+ might consider increasing supply as a strategic move to influence non-OPEC+ production. This could potentially lead to a significant drop in prices, especially if OPEC+ takes measures to discourage U.S. shale growth or if economic downturns reduce oil demand.
Morgan Stanley has also revised its oil price forecasts downward, anticipating increased supply from both OPEC and non-OPEC producers amid signs of weakening global demand. The bank now expects the crude oil market to remain tight through the third quarter but to stabilize in the fourth quarter and potentially move into surplus by 2025.
Morgan Stanley has lowered its fourth-quarter forecast to $80 per barrel, down from $85, and expects prices to gradually decline to $75 per barrel by the end of 2025, slightly below the previous estimate of $76.