Goldman Sachs on Monday said it expects non-OPEC+ output growth to slow by about 0.3 million barrels per day (mb/d) over a 12-month period for every $10 per barrel decline in oil prices when Brent crude is above $70.
The Wall Street bank estimates 2026 non-OPEC+ supply growth to decrease from 1.05 mb/d to 0.6 mb/d with 2026 Brent prices at $60 per barrel, and another 0.1 mb/d decline at $50 per barrel.
“These negative production impacts would in turn support prices by $5 and $13/bbl, respectively, precluding further downside, and supporting our soft floor in the mid $60s below Brent,” Goldman Sachs said in a report.
U.S. shale oil production growth is expected to decrease by 0.2 mb/d for every $10 per barrel price drop when Brent is above $70, increasing to 0.5 mb/d per $10 when Brent is between $50 and $70, the bank said.
Below $30 per barrel, production sharply declines due to well-head shut-ins, the bank added.
Outside the U.S., non-OPEC+ producers show a smaller but non-linear response, with production decreasing by 0.1 mb/d over 12 months, for every $10 per barrel drop in crude prices when Brent is above $60, doubling as prices fall to $40-$60, and potentially leading to significant shut-ins as prices approach well-head variable costs, Goldman Sachs said.
(Reporting by Noel John in Bengaluru; Editing by Leslie Adler)