Goldman Sachs Slashes Year-End Oil Price Forecast To $86
Goldman Sachs Slashes Year-End Oil Price Forecast To $86 | OilPrice.com Top Asian Refiner Sells Large Volumes Of Oman Crude Oil The delayed GCC Railway project,… Oil has largely given up… Goldman Sachs has slashed its year-end oil price forecast to $86 per barrel Brent, down from a previous projection of $95, as it sees higher supply from sanctioned oil exporters offsetting the recent OPEC+ and Saudi cuts amid potentially underwhelming demand. Goldman analysts have been bullish on oil in recent months, expecting tight markets in the second half of the year. Less than two weeks ago, the Wall Street bank said it expects a rally in oil and commodities, after the biggest-ever destocking in commodities that is currently underway. But even back then, Goldman’s analysts acknowledged their price calls had been wrong so far this year. “Bulls, like ourselves, find comfort in the fact that end-use demand across the commodity complex has not shown recessionary signs and investment in supply remains elusive,” Goldman’s analysts said in the note at the end of May, as carried by Bloomberg. “But this misses the point that we were wrong on price expectations.” Between the end of May and the second week of June, the OPEC+ producers decided keep the current cuts until the end of 2024, while OPEC’s top producer, Saudi Arabia, said it would voluntarily reduce its production by 1 million bpd in July, to around 9 million bpd. The cut could be extended beyond July, Saudi Energy Minister Prince Abdulaziz bin Salman said. Despite the unilateral Saudi cut and the extended production reductions at the broader OPEC+ group, Goldman Sachs now sees little chance of an oil price spike later this year, expecting Brent at $86 a barrel in December, and WTI Crude at $81, down from $89 per barrel in the previous forecast. Resilient Russian oil supply and higher-than-expected supply from Iran and Venezuela will weigh on prices, according to the bank. “After an initial sharp 1.5 million barrels per day drop, Russian supply has nearly fully recovered despite the decision by many companies to stop buying Russian barrels,” Goldman’s analysts wrote in a June 11 note as carried by CNBC. ADVERTISEMENT “The extra Saudi cut and our expectation that OPEC+ will extend half of its April voluntary cut in 2024 will likely only partly offset these bearish shocks.” By Tsvetana Paraskova for Oilprice.com More Top Reads From Oilprice.com: Join the discussion| Back to homepage ADVERTISEMENT
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