Growing oil demand and extended supply cuts have pushed the market into a deficit and will allow OPEC to sustain Brent crude prices in a range between $80 and $105 per barrel next year, Goldman Sachs said in a note.
The bank raised its year-ahead Brent forecast to $100 a barrel from $93, citing modestly sharper inventory draws. “The key reason is that significantly lower OPEC supply and higher demand more than offset significantly higher US supply.”
Goldman assumed Saudi Arabia would gradually unwind its voluntary output cut of 1 million bpd starting in the second quarter of 2024, but expected the 1.7 million bpd cut agreed with eight other OPEC+ members to hold throughout next year.
“Most of the rally is behind us,” and Brent was unlikely to hold above $105 in a sustained manner next year, it said, adding that it does not see Brent stabilizing below $80 per barrel next year either, when global oil demand led by Asia expected to grow by 1.8 million bpd with an economic soft landing still in sights.