Goldman raises oil price forecasts - Lower production in the Middle East is affecting
Goldman Sachs has raised its fourth-quarter oil price forecasts to $90 a barrel for Brent crude and $83 for U.S. West Texas Intermediate, due to lower production from the Middle East.
"Economic risks are greater than our base case alone suggests due to net upside risks to oil prices, exceptionally high refined product prices, risks of product shortages and the unprecedented scale of the shock," Goldman Sachs analysts said.
The forecast assumes a normalization of Gulf exports through the Strait of Hormuz by the end of June, compared to mid-May previously, and a slower recovery of production in the Persian Gulf.
Goldman Sachs estimates that Middle East crude oil production losses of 14.5 million barrels per day are causing global oil inventories to draw down at a record pace of 11-12 million barrels per day in April.
Goldman Sachs expects the global oil market to swing from a surplus of 1.8 million barrels per day in 2025 to a deficit of 9.6 million barrels per day in the second quarter of 2026.
Global oil demand is expected to fall by 1.7 million barrels per day in the second quarter and 100,000 barrels per day in 2026 compared to the same period the same year, due to rising prices of refined products.
"Since extreme inventory draws are not sustainable, even greater demand losses may be required if the supply shock persists longer," analysts said.
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