Goldman Sachs Group Inc., one of the most bullish banks on its outlook for oil, has reviewed its forecasts down as worries over the banking sector and the potential for recession outweigh a surge in demand from China.

The bank’s analysts now see Brent reaching $94 a barrel for the 12 months ahead, and $97 a barrel in the second half of 2024, versus $100 a barrel previously.

“Oil prices have plunged despite the China demand boom given banking stress, recession fears, and an exodus of investor flows. Historically, after such scarring events, positioning and prices recover only gradually, especially long-dated prices,” the bank said in a March 18 note.

Global markets have been roiled this week as turmoil at Credit Suisse Group AG triggered panic across markets. Oil has slumped to a 15-month low, with Brent dropping 12 per cent this week to below $73 a barrel.

Following the decline in prices, the bank now expects the Organization of Oil Exporting Countries  (OPEC)  to only increase output in the third quarter of 2024, versus in the second half of 2023 which Goldman had estimated before the price rout.

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