(MENAFN) Goldman Sachs has adjusted its forecast for brent crude oil prices for 2025, lowering its average price expectation and narrowing its price range by USD5 per barrel. The bank now anticipates that Brent crude will average USD77 per barrel in 2025, down from a previous forecast of USD82. The revised price range for Brent crude is now set between USD70 and USD85 per barrel. This adjustment comes in response to unexpected increases in oil inventories and a slowdown in demand from China, which are both expected to exert downward pressure on oil prices. Despite this, Goldman Sachs noted that demand from India and lower interest rates are helping to mitigate the extent of the price decline.

In addition, Goldman Sachs highlighted that U.S. oil supplies are surpassing earlier expectations, while demand growth in China has cooled. This shift has contributed to the adjustment in price forecasts. The Organization of the Petroleum Exporting Countries (OPEC) has also revised its global oil demand growth forecast for the coming year, reducing it to 1.78 million barrels per day from an earlier estimate of 1.85 million barrels per day. Goldman Sachs remains optimistic that OPEC will increase production in the fourth quarter.

OPEC+—which includes OPEC members and allies such as Russia—has been implementing a series of production cuts since late 2022 to stabilize the market. Most of these cuts are set to remain in effect until the end of 2025. On August 1, OPEC+ announced plans to begin unwinding the most recent round of cuts, totaling 2.2 million barrels per day, starting in October. However, these reductions may be paused or reversed if market conditions necessitate such measures. Recently, oil prices have experienced volatility, with a recent decline following a rise of more than 7 percent over three sessions, driven by concerns over escalating conflicts in the Middle East and disruptions to Libyan oil fields. 

MENAFN27082024000045015682ID1108605003