Oil prices are expected to decline through 2026, Goldman Sachs said on Monday, citing a production surge that will keep the market in a large surplus of around 2 million barrels per day. The bank forecast Brent crude will average $56 a barrel and WTI $52 in 2026, below current forward curves of $63 and $60.
“The 2025-2026 supply wave mostly results from long-cycle projects that saw Final Investment Decisions (FIDs) just before the pandemic, got delayed during Covid, and are now all coming online and from OPEC’s strategic decision to unwind production cuts,” the bank noted. OPEC+, or the Organization of the Petroleum Exporting Countries plus Russia and other allies, has been boosting output since April. Other producers, such as the U.S. and Brazil, are also increasing supply, adding to glut fears and weighing on prices. The International Energy Agency said the global oil market faces an even bigger surplus next year of as much as 4.09 mbpd. Goldman Sachs expects prices to rebound from 2027 as low 2025–2026 prices weigh on non-OPEC production and very few new projects come online after 15 years of underinvestment. “We therefore expect Brent/WTI to rise to our long-run $80/76 forecasts by late 2028,” the bank said. In 2026/2027, Brent crude could fall into the $40s if non-OPEC supply proves more resilient than expected or if the global economy enters a recession, but could rise above $70 a barrel if Russian supply declines more sharply, Goldman Sachs said.
Brent crude futures were trading around $64.31 a barrel as of 1809 GMT, while U.S. West Texas Intermediate crude was trading at $60.02.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Richard Chang)