Oil Daily | Goldman Sachs Cuts Oil Price Forecast Amid Weak Demand and Market Volatility

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Weak demand and domestic prices at four-year lows led to a 6% annual decline in Chinese coal imports in March. China imported 38.73 million metric tons of coal last month, down from 41.38 million tons in March 2024. Lower domestic prices and high inventories at ports contributed to the decline.

China remains a leader in renewable energy capacity installations and coal-fired power, driving record-high global coal demand. Thermal power generation rose by 1.5% in 2024 to 6.34 trillion kWh. Coal remains the baseload of China’s power system amid increasing electrification of homes and transport.

G7 and the UK are considering reducing the price cap on Russian oil exports to impact oil revenues. The cap has been deemed "meaningless" in the current oil price context. Russia has adapted by using domestic and Asian insurers and shipping operators, reducing the cap's effectiveness.

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Goldman Sachs has reduced its oil price outlook for the third time since April, citing weaker-than-expected demand growth. The bank predicts Brent crude averaging $63 this year and $58 in 2026. Risks to this forecast include potential OPEC policy changes and recession impacts.

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Oil market volatility continued with prices initially declining and then rebounding early Monday. China's recent hike of tariffs on U.S. imports to 125% in response to Trump's tariff increase adds to uncertainty. Economic data from China and potential U.S. actions on Iranian oil exports further influence market dynamics.