Recession Fears and Rising Supply May Drive Down Oil Prices, Says Goldman Sachs
14 April 2025 路 Uncategorized 路
Source: 路 https://finance.technews.tw/2025/04/14/goldman-sachs-estimates-oil-prices-will-fall-to-2026/
Goldman Sachs predicts oil prices could continue to decline through 2026 due to rising recession risks and increased supply from OPEC+ countries.
According to a recent report by Reuters, Goldman forecasts average crude oil prices for West Texas Intermediate (WTI) and Brent Crude will be $63 per barrel and $59 per barrel respectively during the remainder of 2025. These averages are projected to decrease further in 2026, reaching $58 per barrel and $55 per barrel, respectively.
Weak international oil prices have recently been attributed to concerns about an economic recession stemming from trade wars initiated under the Trump administration. Goldman now predicts that global petroleum demand growth could be as low as an additional 300 thousand barrels daily compared with last year鈥檚 levels through the end of 2025.
In early April, President Donald Trump announced reciprocal tariffs; however, policy shifted a week later to temporarily suspend these for regions outside China (implementing a uniform rate of 10%) while increasing Chinese tariff rates up to 145%. In response, China imposed retaliatory tariffs at 125%, creating an unfavorable environment for global economic growth.
OPEC+ has begun gradually reversing its voluntary daily production cuts of two million barrels since April. Goldman Sachs estimates that under severe recession conditions and a full recovery by OPEC+ of the previously cut output gap, oil prices could fall to $40 per barrel.
The May futures contract on NYMEX closed last week at $61.50 per barrel, representing a 0.8% decline from previous levels; Brent crude鈥檚 near-month future contracts traded on ICE Futures Europe ended the period with a drop of 1.3%, closing at $64.76.
The Financial Times recently noted that tariffs have suppressed international oil prices and put pressure on Russia's economy, potentially reducing funding for Putin's war efforts. Experts estimate that if current price levels persist this year, Russian budget revenues could be lower by an estimated 2.5% compared to forecasts, necessitating increased borrowing or cuts in non-military spending.
Russian officials rarely acknowledge economic uncertainty; however, Elvira Nabiullina, head of Russia鈥檚 Central Bank, has stated that trade wars may slow down global growth and reduce export demand.
According to a recent report by Reuters, Goldman forecasts average crude oil prices for West Texas Intermediate (WTI) and Brent Crude will be $63 per barrel and $59 per barrel respectively during the remainder of 2025. These averages are projected to decrease further in 2026, reaching $58 per barrel and $55 per barrel, respectively.
Weak international oil prices have recently been attributed to concerns about an economic recession stemming from trade wars initiated under the Trump administration. Goldman now predicts that global petroleum demand growth could be as low as an additional 300 thousand barrels daily compared with last year鈥檚 levels through the end of 2025.
In early April, President Donald Trump announced reciprocal tariffs; however, policy shifted a week later to temporarily suspend these for regions outside China (implementing a uniform rate of 10%) while increasing Chinese tariff rates up to 145%. In response, China imposed retaliatory tariffs at 125%, creating an unfavorable environment for global economic growth.
OPEC+ has begun gradually reversing its voluntary daily production cuts of two million barrels since April. Goldman Sachs estimates that under severe recession conditions and a full recovery by OPEC+ of the previously cut output gap, oil prices could fall to $40 per barrel.
The May futures contract on NYMEX closed last week at $61.50 per barrel, representing a 0.8% decline from previous levels; Brent crude鈥檚 near-month future contracts traded on ICE Futures Europe ended the period with a drop of 1.3%, closing at $64.76.
The Financial Times recently noted that tariffs have suppressed international oil prices and put pressure on Russia's economy, potentially reducing funding for Putin's war efforts. Experts estimate that if current price levels persist this year, Russian budget revenues could be lower by an estimated 2.5% compared to forecasts, necessitating increased borrowing or cuts in non-military spending.
Russian officials rarely acknowledge economic uncertainty; however, Elvira Nabiullina, head of Russia鈥檚 Central Bank, has stated that trade wars may slow down global growth and reduce export demand.