Goldman Sachs Adjusts OPEC+ Production Forecast, Maintains Oil Price Outlook Despite Market Volatility
Goldman Sachs has revised its short-term projections for OPEC+ oil production, forecasting that the alliance will increase output from December, rather than October as initially anticipated. The adjustment follows OPEC+’s decision to defer its planned output hikes for October and November in response to plummeting crude prices, which recently touched their lowest point in nine months.
In a note released on Friday, Goldman Sachs maintained its Brent crude price forecast within the $70-85 per barrel range, with a specific target of $74 per barrel by December 2025. The investment bank noted that while OPEC+ may modestly curtail supply over the coming months, the effect is expected to be mitigated by a quicker-than-anticipated recovery in Libya’s oil production and softer demand from China.
“We continue to see risks to our $70-85 range skewed to the downside, largely driven by the current surplus in global spare capacity and the potential for weakened demand, particularly stemming from China’s economic softness and potential trade tensions,” the note outlined.
On Thursday, OPEC+—a consortium of the Organisation of the Petroleum Exporting Countries and allies such as Russia—opted to delay its production ramp-up, citing persistent market instability. The group further suggested that it may suspend or even reverse these increases should market conditions warrant further intervention.
Despite these production delays, Goldman Sachs remains confident in its medium-term outlook for Brent crude, indicating that the current volatility is unlikely to lead to significant long-term adjustments. However, the firm also underscored potential downside risks, especially as market participants contend with rising inventories and economic uncertainties in major energy-consuming nations.
As of Friday, Brent crude futures fell $1.63, or 2.24%, to settle at $71.06 per barrel, marking their lowest level since December 2021. Similarly, U.S. West Texas Intermediate crude dropped by $1.48, or 2.14%, to $67.67 per barrel, its lowest point since June 2023.
Goldman Sachs’ tempered outlook reflects a cautious approach amidst a confluence of global factors, including tepid economic growth in China, ongoing geopolitical uncertainties, and an unpredictable supply-demand dynamic in the global oil markets.
