"Oil prices will fall in 2026" - Goldman Sachs: Recession risk and trade war, the main factors
Goldman Sachs expects oil prices to fall through the end of this year and next year, due to the growing risk of a recession and higher supply from the OPEC+ group.
The bank expects Brent and WTI oil prices to fall, averaging $63 and $59 per barrel, respectively, for the remainder of 2025, and $58 and $55 in 2026.
Given the weak growth outlook amid a global trade war, the bank expects oil demand to grow by only 300,000 barrels per day between the end of last year and the end of 2025.
The bank has cut its forecasts for global demand growth in the fourth quarter of 2026 by 900,000 barrels per day since mid-March, due to escalating trade tensions between the US and China.
Beijing raised tariffs on US imports to 125% on Friday, retaliating against President Donald Trump's decision to raise duties on Chinese goods, threatening to upend global supply chains.
Despite the market already pricing in increased oil supplies, large surpluses of 800,000 barrels per day in 2025 and 1.4 million barrels per day in 2026 will continue to put downward pressure on prices, according to Goldman Sachs.
In a scenario of a global economic slowdown or a complete reversal of the 2.2 million barrels per day of cuts by the Organization of the Petroleum Exporting Countries and allies, called OPEC+, Brent oil prices are expected to fall to $40 in 2026, and potentially below $40 in an extreme combined scenario, the bank said.
Brent crude futures fell to around $64.72 a barrel on Monday morning, while WTI futures were at $61.44.
Goldman Sachs also lowered its U.S. shale oil supply forecast for the fourth quarter of 2026 by 500,000 barrels per day.
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