KEY POINTS
- Goldman forecasts a 2.3 million barrels-a-day oil surplus in 2026.
- Brent and WTI are expected to bottom late next year.
- A market deficit is projected to return in 2027.
Oil prices are set to face renewed pressure next year as a surge in supply pushes the market deeper into surplus, according to Goldman Sachs, which says rising inventories and steady non-OPEC output growth will likely cap prices despite ongoing geopolitical risks.
Supply glut reshapes outlook
Goldman Sachs said oil prices are likely to drift lower in 2026 as swelling supply creates a surplus across global markets. In a note published Sunday, the investment bank kept its average 2026 price forecasts unchanged at $56 per barrel for Brent crude and $52 for U.S. West Texas Intermediate. It expects prices to slide further toward the end of the year, with Brent and WTI bottoming at $54 and $50, respectively, in the fourth quarter as inventories across OECD countries continue to build.
The bank pointed to rising global oil stocks and its projection of a 2.3 million barrels-a-day surplus in 2026 as key factors behind the outlook. Goldman said lower prices may be needed to slow non-OPEC supply growth and support steady demand expansion, assuming there are no major supply disruptions or production cuts from OPEC.
Oil markets remain sensitive to geopolitical developments involving Russia, Venezuela and Iran, which analysts said will continue to fuel price swings even as the broader supply picture softens. Brent crude futures were trading near $63 a barrel as of 0412 GMT, while WTI hovered around $59. Both benchmarks posted their worst annual performance since 2020 last year, sliding by almost 20 percent.
Recovery delayed until 2027
Goldman expects prices to begin recovering in 2027 as the market returns to a deficit. The shift is forecast to come as non-OPEC supply growth slows and demand remains firm. The bank now sees Brent and WTI averaging $58 and $54 that year, about $5 lower than its previous estimate.
The revision reflects higher expected output in the U.S., Venezuela and Russia, where 2027 supply forecasts were raised by 0.3, 0.4 and 0.5 million barrels a day, respectively. U.S. policy priorities around strong energy supply and lower fuel costs are also expected to limit sustained price gains ahead of the midterm elections, according to Reuters.
Looking further ahead, Goldman said years of weak long-cycle investment could set the stage for stronger prices later in the decade. It forecasts average Brent and WTI prices of $75 and $71 between 2030 and 2035, still about $5 below earlier projections. Risks remain tilted modestly to the downside, driven by the potential for further non-OPEC supply growth and the absence of expected OPEC cuts.
