Goldman Sachs Group Inc. has lowered its oil price forecasts, citing reduced US growth prospects due to tariffs and increased oil output from OPEC and its allies.
This adjustment follows a decline in crude prices from their January peak, driven by abundant supply, weaker demand expectations from top importer China, and the ongoing trade war.
In a note dated Sunday, Goldman analysts, including Daan Struyven, stated, “While the $10 per barrel drop since mid-January exceeds the change in our base case fundamentals, we are cutting our December 2025 forecast for Brent by $5 to $71.” They also warned that risks to their forecast remain negative, due to the potential for further tariff hikes and longer production increases from OPEC+.
Several major oil traders, including Vitol Group and Gunvor Group, have become more pessimistic, forecasting an oversupply. The International Energy Agency (IEA) recently said that the trade war and the commitment of OPEC and its allies to increase oil shipments are weakening demand. The IEA predicts a surplus of 600,000 barrels per day this year, or 0.6% of global daily consumption.
Despite this, Goldman Sachs expects a modest recovery in oil prices in the coming months, thanks to resilient US economic growth and ongoing US sanctions that show no signs of easing. Geopolitical risks, such as the recent US order to strike Houthi-controlled sites in Yemen amid threats to Red Sea shipping, also contribute to uncertainty.
Goldman revised its forecast for global oil demand growth, now expecting an increase of 900,000 barrels per day in January, 18% lower than its previous estimate. The bank projects that Brent will trade between $65 and $80 per barrel and average $68 next year.
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