The decision by Goldman Sachs comes as the oil market faces potential oversupply in the coming years, with OPEC+ possibly reversing its voluntary production cuts. Such a move could significantly influence global oil prices, especially as the cartel seeks to strategically manage non-OPEC oil production. The revision also takes into account the possibility of a slowdown in Chinese oil demand, which would further pressure prices downward.
Morgan Stanley has similarly adjusted its forecast, projecting that Brent crude will range between $75 and $78 per barrel in 2025. Analysts from both banks note that while the oil market currently remains in deficit, it is expected to achieve equilibrium by the end of 2024, with a surplus likely emerging in 2025. This potential surplus is driven by various factors, including increased production from both OPEC+ and non-OPEC countries, as well as a possible economic downturn that could dampen demand.
Goldman's analysis highlights several scenarios that could result in oil prices falling even further, potentially to as low as $60 per barrel. These include continued weak demand from China, a broad-based U.S. import tariff, or a full reversal of OPEC+ production cuts.
The revised forecasts underscore the uncertainty surrounding the global oil market as it navigates the complex interplay of supply, demand, and geopolitical factors. As the industry adjusts to these evolving conditions, stakeholders are closely monitoring the actions of key players like OPEC+ and the impact on future oil prices.
This update reflects the shifting sentiment on Wall Street regarding the oil market, with major financial institutions becoming increasingly cautious about the prospects for crude oil in the near to medium term.
Sources: [InvestmentNews], [Business News].