- In an unforeseen move, Goldman Sachs has cut its oil price forecast by nearly 10% due to a predicted rise in oil supply and waning demand.
- Despite Saudi Arabia's announcement of a substantial production cut, Goldman has issued its third downward revision in six months.
- The report cites significant oil supply increases from Russia and Iran and potential boosts from nations under sanctions as key factors driving these adjustments.
In a surprising move, Goldman Sachs, one of the world's leading investment banks, has recently cut its forecast for oil prices by nearly a tenth. Analysts attribute this unexpected move to the anticipated increase in crude oil supply and a relative slowdown in demand.
A report published late Sunday revealed the bank's reduction in the December Brent outlook, lowering it to $86 a barrel from its previous projection of $95. Concurrently, Goldman also scaled back its West Texas Intermediate (WTI) forecast for December from $89 per barrel to $81, marking the bank's third downward revision in a mere half a year.
The report was released even in the wake of last week's announcement by OPEC heavyweight Saudi Arabia, which outlined a production cut of another million barrels per day starting in July. Interestingly, OPEC has chosen not to make alterations to its scheduled production cuts for the rest of the year.
Goldman analysts, under the guidance of the bank's Global Head of Commodities Research, Jeffrey Currie, have observed significant surges in oil supply from Iran and Russia, pushing speculative positioning to near record-lows. Russia, in particular, has displayed remarkable resilience in its oil production despite Western sanctions.
Concluding the report, Goldman made some significant upward revisions for oil supply predictions from nations under sanctions. With "2024 upgrades for Russia, Iran, and Venezuela," and the potential for an additional million barrels a day in crude exports if a U.S.-Iran deal comes to fruition, the outlook for the global oil market looks increasingly bearish.
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