Goldman Sachs has cut its 2025 Brent crude price forecast and its price range by $5 a barrel, citing unexpected increases in oil inventories and weaker Chinese demand as likely to weigh on the market.
The bank explained in a note that it reduced the range of price movements for Brent crude to between $70 and $85 per barrel, and expected its average price to be $77 per barrel in 2025, down from $82.
Goldman Sachs added that US supplies are exceeding expectations, while demand growth in China has slowed, but added that the decline in prices is being curbed by demand in India and lower interest rates, among other factors.
The Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for global oil demand growth next year to 1.78 million barrels per day, down from 1.85 million barrels per day in a previous forecast, in a monthly report.
Goldman said we still assume OPEC will raise production in the fourth quarter.
OPEC+, which includes OPEC and allies including Russia, has been adopting a series of production cuts since late 2022 to support the market, most of which are in effect until the end of 2025.
On August 1, OPEC+ confirmed a plan to start unwinding the latest tranche of 2.2 million barrels per day of cuts from October, with the caveat that they could be paused or reversed if necessary.
Oil prices have recently stalled, falling on Tuesday after rising more than 7 percent in the previous three sessions on supply concerns over a widening conflict in the Middle East and the closure of Libyan oil fields.
