Goldman Sachs Predicts 7% Drop in Brent Oil Prices by 2026

Goldman Sachs has reiterated its prediction that Brent and WTI crude oil prices will experience a gradual decline. The financial institution projects that Brent crude oil will average 60 dollars per barrel for the remainder of 2025, with a slight decrease to 56 dollars per barrel in 2026. Similarly, WTI crude oil prices are expected to average 56 dollars per barrel in 2025 and 52 dollars per barrel in 2026. This outlook is primarily driven by the anticipated robust growth in oil supply from regions outside the United States, particularly in shale oil production, which is expected to exert downward pressure on oil prices.

The forecast comes at a time when the global economy is experiencing a slowdown and trade tensions are on the rise, both of which have contributed to a recent decline in oil prices. Despite these challenges, the overall inflation rate is expected to cool due to tariff measures and slower global economic growth, while core inflation is projected to rise gradually. This complex economic environment adds layers of uncertainty to the oil market's dynamics.

Goldman Sachs' analysis suggests that the supply glut in the oil market is more nuanced than initially thought, with various factors influencing the price trajectory. The decision by OPEC+ to increase production in June is also expected to impact the market, although the extent of this impact remains uncertain. The supply growth from non-U.S. regions, particularly in shale oil production, is seen as a key factor in the downward pressure on oil prices. This growth is expected to continue, further contributing to the downward trend in oil prices.

The investment bank's forecast aligns with broader market sentiments that anticipate a gradual decline in oil prices due to increasing supply and moderating demand. The analysis underscores the importance of monitoring global economic trends and supply dynamics in assessing the future direction of oil prices. As the market continues to navigate these complexities, investors and stakeholders will be closely watching for any shifts in the supply-demand balance that could influence oil prices in the coming months. The nuanced supply dynamics and the impact of global economic trends will be critical factors to consider in the evolving oil market landscape.