Goldman Sachs forecasts that Brent crude prices will average around $80 per barrel in 2024, despite a projected oil supply deficit and ongoing geopolitical tensions. The investment bank expects a surplus of 0.4 million barrels per day (mb/d) in 2025, which will help stabilize prices.
In a note released Thursday, Goldman Sachs outlined its base case scenario, predicting that Brent prices will stay within a $70 to $85 per barrel range. The bank cited high spare capacity as a factor that will limit any significant price increases. At the same time, the price responsiveness of OPEC and shale producers will prevent prices from falling too low. However, the bank also acknowledged that the risks of price fluctuations are increasing.
On Friday, oil prices saw a rise, with Brent futures reaching $74.37 per barrel. This increase came after Russia launched a ballistic missile at Ukraine, heightening concerns about the potential for a broader conflict that could tighten global oil supplies.
Goldman Sachs also sees potential for higher Brent prices in the near term. The bank suggests that prices could climb into the mid-$80s by the first half of 2025, particularly if sanctions on Iran result in a reduction of one million barrels per day from its supply. Despite these short-term risks to the upside, Goldman noted that medium-term price risks are tilted to the downside, primarily due to abundant spare production capacity.
While global oil production capacity remains high, Goldman Sachs anticipates tight refining conditions. As a result, gasoline and diesel margins are expected to improve further.
Looking ahead, the bank projects Brent will average $76 per barrel in 2025 but has lowered its forecast for 2026 to $71 per barrel, factoring in a 0.9 mb/d surplus.
Goldman Sachs expects global oil demand to continue its growth for the next decade, driven by rising energy demand alongside economic growth. Additionally, the challenges of decarbonizing sectors such as air travel and petrochemical production will further fuel this demand.
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