Goldman Sachs Does Not See Oil Reaching $100 This year

Goldman Sachs Group Inc. is one of the most bullish banks regarding its outlook for oil. However, worries about the banking sector as well as the possibility for recession have pushed down its forecasts.

Analysts at the bank see Brent rising to $94 per barrel over the next 12 months, $97 per barrel in the second half 2024, and $100 per barrel before that.

In a March 18 note, the bank stated that oil prices plunged despite China’s demand boom, banking stress, recession fears and an exodus investor flows. “Historically, prices and positioning recover slowly after such severe events, particularly long-dated prices.”

This week, global markets were shaken by turmoil at Credit Suisse Group AG. It triggered panic across the markets. Brent has fallen to $73 per barrel, a drop of 12% from its previous high.

The bank expects OPEC producers will increase output only in the third quarter 2024 after the fall in prices. This is in contrast to the second half 2023 that Goldman had estimated prior to the price rout.