Goldman Sachs raised its forecast for Brent and West Texas Intermediate crude prices for the fourth quarter of 2026 by six dollars per barrel bringing its projections to 60 dollars for Brent and 56 dollars for WTI. The revision was driven by declining inventories across OECD countries. At the same time the bank maintained its assumption that there would be no Iran related supply disruptions and continued to expect a supply surplus during the current year.
The bank also adjusted its annual average projections now expecting Brent to average 64 dollars per barrel compared with a previous estimate of 56 dollars while WTI is projected to average 60 dollars compared with 52 dollars previously.
These revisions came despite a roughly one percent decline in oil prices on Monday as the United States and Iran prepared to hold a third round of nuclear talks easing concerns about escalating geopolitical tensions. Brent was trading near 71 dollars per barrel while WTI stood around 65.75 dollars.
Goldman Sachs explained that its 60 dollar Brent forecast for the fourth quarter reflects a gradual decline in an estimated six dollar geopolitical risk premium along with a five dollar reduction in fair value assumptions due to rising OECD inventories.
The bank maintained its expectation of a global oil surplus in 2026 of about 2.3 million barrels per day assuming no major supply disruptions and no peace agreement between Russia and Ukraine. The surplus estimate reflects a slight reduction of 200 thousand barrels per day in both supply and demand due to relatively slower growth across Asian economies.
Goldman Sachs lowered its 2026 supply projections for Kazakhstan Venezuela Iran and Iraq because of weaker actual production while raising output expectations for the Americas and several key OPEC plus producers that hold spare capacity. The bank expects OPEC plus to begin gradually increasing production in the second quarter of 2026 provided OECD inventories do not accumulate significantly.
However the bank warned of downside risks to fourth quarter 2026 prices of about five dollars for Brent and eight dollars for WTI if sanctions on Iran or Russia are eased more quickly than expected which could lead to higher inventories and greater supply over the longer term. It also projected that Brent and WTI would average 65 and 61 dollars respectively in 2027 before rising to 70 and 66 dollars by December 2027 supported by solid demand and slower supply growth.
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