Goldman projects lower oil prices in 2026 as supply swells
Oil prices are likely to drift lower this year as a wave of supply creates a market surplus, although geopolitical risks tied to Russia, Venezuela and Iran will continue to drive volatility, Goldman Sachs said in a note on Sunday.
The investment bank maintained its 2026 average price forecasts of $56/$52 per barrel for Brent/WTI, and expects Brent/WTI prices to bottom at $54/50 in the last quarter as OECD inventories build up.
“Rising global oil stocks and our forecast of a 2.3mb/d surplus in 2026 suggest that rebalancing the market likely requires lower oil prices in 2026 to slow down non-OPEC supply growth and support solid demand growth, barring large supply disruptions or OPEC production cuts,” Goldman Sachs said.
Brent crude futures were trading around $63 a barrel, as of 0412 GMT, while U.S. West Texas Intermediate crude holds ground at $59. Last year, both the benchmarks posted their worst annual performance since 2020, with an almost 20% decline.
U.S. policymakers’ focus on strong energy supply and relatively low oil prices will keep sustained oil price upside in check ahead of the midterms, analysts at the bank noted.
Prices are expected to gradually start recovering in 2027, with the market returning to a deficit as non-OPEC supply slows down and solid demand growth continues, Goldman analysts said in a note.
The investment bank expects Brent/WTI to average at $58/54 in 2027, although $5 lower than its prior estimate, citing upgrades to 2027 supply in the U.S., Venezuela and Russia by 0.3, 0.4 and 0.5mb/d, respectively.
Goldman said it expects a substantial price recovery later this decade as demand grows through 2040 after years of low long-cycle investment, with 2030–2035 Brent/WTI prices averaging $75/$71, $5 below its previous estimate.
Risks to the price forecasts are skewed modestly to the downside given a further increase in non-OPEC supply, Goldman said, adding that it expects no OPEC production cuts, despite geopolitical risks and low speculative positioning.
“We still recommend investors short the 2026Q3-Dec2028 Brent time-spread to express the 2026 surplus view, and oil producers hedge 2026 price downside.”