Mubasher: Goldman Sachs has projected that oil prices would shrink through the end of 2025 and 2026 due to the increasing risk of a recession and higher supply from the OPEC+ group, according to Reuters.

The US investment bank expected Brent and WTI oil prices to decline to an average of $63 and $59 a barrel, respectively, for the remainder of 2025 and to an average of $58 and $55 in 2026.

Driven by weak growth outlook amid a global trade war, oil demand is forecast to rise by only 300,000 barrels per day (bpd) between the end of 2024 and the end of 2025.

Furthermore, Goldman Sachs cut its global demand growth forecasts for the fourth quarter (Q4) of 2026 by 900,000 barrels-per-day since mid-March due to an escalating trade war between the US and China.

Brent crude futures slipped to trade around $64.72 a barrel as of 0155 GMT on Monday, 14 April, while WTI futures were at $61.44.

Goldman Sachs also lowered its US shale supply forecast for Q4-26 by 500,000 bpd.

It is worth noting that China increased its tariffs on US imports to 125% on Friday, 11 April 2025, hitting back against President Donald Trump's decision to raise duties on Chinese goods in addition to raising the stakes in a trade war that threatens to upend global supply chains.

The Wall Street brokerage forecasts that despite the market already accounting for some future inventory builds, large surpluses of 800,000 bpd in 2025 and 1.40 million bpd in 2026 will continue to exert downward pressure on oil prices.

“In a scenario of a global economic slowdown or a complete reversal of the 2.2 million bpd of voluntary cuts by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, Brent oil prices could likely fall into the $40 range in 2026, and potentially drop below $40 in an extreme combined scenario,” Reuters cited Goldman Sachs.

 

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