Jan 12, 2026
Goldman forecasts decreasing oil prices in 2026 due to an increase in supply.
Oil prices are expected to decline this year due to an influx of supply creating a surplus in the market, although geopolitical tensions involving Russia, Venezuela, and Iran will maintain price volatility, according to a Goldman Sachs report from Sunday.
The investment bank reiterated its forecasts for average prices in 2026 at $56 for Brent and $52 for WTI, anticipating that prices will hit a low of $54 and $50 in the last quarter as OECD inventories increase.
"Increasing global oil inventories and our prediction of a 2.3 million barrels per day surplus in 2026 indicate that the market may need lower oil prices to restore balance by curbing non-OPEC supply growth and supporting strong demand, unless there are significant supply disruptions or OPEC cuts," Goldman Sachs stated.
As of 0412 GMT, Brent crude futures were priced around $63 per barrel, while U.S. West Texas Intermediate crude stood at $59. Last year, both benchmarks experienced their worst annual performance since 2020, dropping nearly 20%.
Analysts at Goldman Sachs noted that U.S. policymakers' emphasis on robust energy supply and relatively low oil prices will limit significant price increases before the midterm elections.
The market is anticipated to begin recovering gradually in 2027, as non-OPEC supply slows and demand continues to grow. Goldman analysts predict that Brent and WTI will average $58 and $54 in 2027, which is $5 lower than earlier estimates, owing to supply upgrades in the U.S., Venezuela, and Russia of 0.3, 0.4, and 0.5 million barrels per day, respectively.
Goldman also forecasts a considerable price recovery later in the decade as demand increases through 2040 after years of underinvestment, with Brent and WTI prices averaging $75 and $71 between 2030 and 2035, which is $5 below previous estimates.
The risks surrounding these price forecasts lean slightly downward due to potential increases in non-OPEC supply. Goldman also mentioned it expects no cuts from OPEC despite ongoing geopolitical uncertainties and low speculative positioning.
"We continue to advise investors to short the 2026Q3-Dec2028 Brent time-spread to reflect the anticipated surplus in 2026 and recommend oil producers hedge against potential price declines in 2026."
The investment bank reiterated its forecasts for average prices in 2026 at $56 for Brent and $52 for WTI, anticipating that prices will hit a low of $54 and $50 in the last quarter as OECD inventories increase.
"Increasing global oil inventories and our prediction of a 2.3 million barrels per day surplus in 2026 indicate that the market may need lower oil prices to restore balance by curbing non-OPEC supply growth and supporting strong demand, unless there are significant supply disruptions or OPEC cuts," Goldman Sachs stated.
As of 0412 GMT, Brent crude futures were priced around $63 per barrel, while U.S. West Texas Intermediate crude stood at $59. Last year, both benchmarks experienced their worst annual performance since 2020, dropping nearly 20%.
Analysts at Goldman Sachs noted that U.S. policymakers' emphasis on robust energy supply and relatively low oil prices will limit significant price increases before the midterm elections.
The market is anticipated to begin recovering gradually in 2027, as non-OPEC supply slows and demand continues to grow. Goldman analysts predict that Brent and WTI will average $58 and $54 in 2027, which is $5 lower than earlier estimates, owing to supply upgrades in the U.S., Venezuela, and Russia of 0.3, 0.4, and 0.5 million barrels per day, respectively.
Goldman also forecasts a considerable price recovery later in the decade as demand increases through 2040 after years of underinvestment, with Brent and WTI prices averaging $75 and $71 between 2030 and 2035, which is $5 below previous estimates.
The risks surrounding these price forecasts lean slightly downward due to potential increases in non-OPEC supply. Goldman also mentioned it expects no cuts from OPEC despite ongoing geopolitical uncertainties and low speculative positioning.
"We continue to advise investors to short the 2026Q3-Dec2028 Brent time-spread to reflect the anticipated surplus in 2026 and recommend oil producers hedge against potential price declines in 2026."