Goldman Sachs Raises Crude Price Outlook as OECD Stockpiles Lag
Goldman Sachs has upwardly revised its year-end oil price forecasts, citing lower-than-anticipated inventory builds across developed economies. The bank now projects Brent crude will reach $60 a barrel in the fourth quarter, up from its previous estimate of $54, as supply disruptions and logistical shifts in sanctioned crude tighten the immediate market outlook.
The adjustment follows a period where stockpiles in OECD countries failed to accumulate at the expected pace. Analysts attribute this shortfall to significant supply interruptions in January and the accumulation of sanctioned crude offshore, which has remained outside major pricing hubs. Despite the price hike, Goldman maintains that the global market is still heading toward a supply surplus, albeit from a lower starting point for inventories than previously modeled.
Inventory Shifts and Geopolitical Headwinds
Market volatility remains a factor as crude futures dipped roughly 1% in early European trading on Monday. This retreat followed news of negotiations between the U.S. and Iran, coupled with investor anxiety regarding President Trump's tariff policies. This slight decline comes on the heels of a nearly 6% price surge last week, reflecting a tug-of-war between geopolitical risk and fundamental supply data.
Goldman’s revised model factors in a gradual reduction of the $6-a-barrel geopolitical risk premium as tensions potentially stabilize. However, the bank still anticipates a 2.3 million-barrel-a-day surplus for the year, assuming no major external shocks or a resolution to the Russia-Ukraine conflict. Production in the Americas continues to outpace expectations, while temporary outages in Kazakhstan are expected to resolve shortly.
Long-Term Outlook and OPEC Strategy
Looking further ahead, the bank has also increased its 2027 price forecasts, setting Brent at $65 and WTI at $61 a barrel. This long-term bullishness is paired with an expectation that OPEC+ will begin a gradual production increase starting in the second quarter of this year to address the lack of inventory growth. Goldman also projects a slight contraction in global supply by approximately 300,000 barrels a day by 2027.
Comments (0)
No comments yet. Be the first!