Goldman Sachs Doubles Down on Bearish Oil Outlook Despite Rising Demand

Goldman Sachs analysts issued yet another update to their oil price forecast, reiterating expectations of weaker prices this year and next, on the back of substantial growth in non-OPEC supply—excluding U.S. shale.

In a note, the analysts said “oil production growth from non-OPEC ex Russia ex shale top projects will likely accelerate to 1MB/d over the next two years”, adding that natural gas liquids production was also set for a rise over the period, thanks to the launch of new projects in Saudi Arabia and Qatar.

The exclusion of U.S. shale from the prediction for non-OPEC output growth is quite significant, seeing as non-OPEC production forecasts normally focus on U.S. shale. Yet with prices depressed, producers in the shale patch have begun to retrench, and production growth is already slowing down.

Indeed, Goldman’s analysts said that if prices remained subdued over the next two years, the peak in U.S. shale production growth could come earlier than previously expected. There is, however, a possibility that Goldman Sachs analysts are overestimating the supply situation: UBS said in an update that global visible oil inventories over the first quarter pointed to a tightly balanced market – not the substantial surplus Goldman and others have assumed, Kpler’s Amena Bakr wrote on X earlier today. The Swiss bank said it expected revisions in both supply and demand projections on the basis of the new data.

Goldman has a 2025 price forecast of $60 per barrel for Brent crude and $56 per barrel for West Texas Intermediate. Goldman’s analysts expect the benchmarks to fall further next year, to $56 for Brent crude and $52 for WTI. The forecast has not been revised upwards despite a revision in demand projections, with the bank now expecting stronger demand growth this year, at 600,000 barrels daily, and 400,000 barrels daily in 2026.

By Irina Slav for Oilprice.com

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