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Goldman Sachs rejoined the $100/bbl oil club Wednesday, nudging its 12-month forecast for Brent crude up from $93, as significantly lower OPEC supply and higher demand more than offset significantly higher U.S. supply, although most of the oil price rally is “behind us.”
Goldman said it assumed Saudi Arabia gradually will unwind its voluntary 1M bbl/day production cut starting in Q2 2024, but expected the 1.7M bbl/day cut agreed with eight other OPEC+ members to hold throughout next year.
“We believe that OPEC will be able to sustain Brent in an $80-$105 range in 2024 by leveraging robust Asia-centric global demand growth,” but the cartel is “unlikely to push prices to extreme levels, which would destroy its long-term residual demand.”
Oil’s rally has rekindled talk of potential $100/bbl prices; earlier this week, Chevron CEO Mike Wirth made such a prediction, citing tighter supplies and dwindling inventories.
U.S. WTI crude futures fell for a second straight day, ending -1% at $90.28/bbl, after climbing to a 10-month high Monday, but analysts said the market seems to be taking a breather from the rally to book profits.
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