Goldman Cuts Oil Forecast to Under $100 After Turning Highly Bullish: Here’s Why

By Malvika Gurung

Investing.com — The global investment banking giant Goldman Sachs (NYSE:) has pared its projections for the oil counter Futures to under $100/barrel in 2023 after turning bullish on the commodity in December 2022.

It has cut the forecast on Brent crude to an average of $94/barrel in the next 12 months while lowering it to $97 a barrel in the second half of 2024, Goldman said on Saturday, cited by Reuters.

Despite the release of pent-up demand as China reopens, oil prices have dipped sharply, driven by the ongoing banking crises, looming recession fears, and an increasing exit of investors.

“Historically, after such scarring events, positioning and prices recover only gradually, especially long-dated prices,” stated Goldman’s analysts.

Further, the New-York based banking behemoth has slashed its demand projections for North America and Europe and raised them for China in 2023. 

In December 2022, GS pegged commodities to be the ‘best-performing’ asset class in 2023, turning highly bullish on the sector and forecasted to give returns of over 40% to investors.

It had projected the Brent crude Futures to surge to $105/barrel in Q4 of 2023.

Key oil counters Brent crude Futures and plummeted up to 15% last week, witnessing their worst weekly loss so far in 2023, led by spurring banking crises in the US and concerns that a rout of this magnitude could spill over into the broader economy, denting activity and potentially damaging crude demand.

Fears of slowing demand have weighed heavily on oil markets this year, keeping prices largely depressed, an Investing.com report stated.



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