Brent crude prices are likely to stay above $75 per barrel as the oil market will withstand macro recessionary fears and find support in the coming weeks, Goldman Sachs said on Monday.
Limited recession risk, strong demand in the West and from India, and very low speculative positioning having room to recover will support oil prices in the coming weeks, analysts at Goldman Sachs said in a note.
Brent crude futures settled down 51 cents, or 0.7%, at $76.30 a barrel on Monday, with prices earlier trading around their lowest levels since January. U.S. West Texas Intermediate crude fell 58 cents, or 0.8%, to $72.94.
However, “while the increase in recession risk following the weak U.S. July employment report and the impact of volatile financial conditions on oil demand further skew the risks to our $75-90 range for Brent prices to the downside, especially in 2025, our base case remains that oil prices will find support in coming weeks,” the bank said.
Wall Street tumbled as fears of the United States tipping into recession following weak economic data last week rippled through global markets.
“The downward shift in the risks around our oil price range increases our conviction that long gold positions now offer portfolios the greatest hedging value across commodities,” Goldman said.
(Reporting by Brijesh Patel and Anushree Mukherjee in Bengaluru Editing by Marguerita Choy)